The Foreclosure Process

There are essentially two types or methods of foreclosures. The most common method of foreclosure involving Arizona homes for sale is known as a non-judicial foreclosure. A non-judicial foreclosure does not require court involvement. The procedure of the non judicial foreclosure is mandated by Arizona Statutes and a Deed of Trust. A judicial foreclosure is more common with a default on a promissory note secured by the property. A judicial foreclosure is overseen by the courts. In Arizona, although both types of foreclosure procedures are allowed by law, a non judicial foreclosure is most frequently used because the foreclosure process is much quicker, less expensive and there is no redemption period after the sale for the homeowner. The parties involved in a non judicial foreclosure include the lender or mortgage company, also referred to as the beneficiary and the Trustor who is the homeowner and the Trustee. A trustee is a third party acting on behalf of the lender or beneficiary to handle the non judicial foreclosure process. The Trustee has the power to carry out a Trustee Sale. A non judicial foreclosure requires a notice of advertisement, commonly referred to as a Notice of Sale. Once a homeowner becomes 91 days delinquent on their mortgage payments, the lender can initiate a Notice of Sale which triggers the start of foreclosure proceedings. A Notice of Sale is a public notice found in general circulation publications. The type of publication depends on the county in which the property is located. This notice must be recorded with the county recorder’s office 90 days prior to the actual foreclosure sale and is also posted on the premises of the subject property. The notice will include the legal description of the property, the date, time and location of the sale as well as the name of the lender, the trustor and the trustee. The terms under the Deed of Trust that a homeowner signs when they purchase a home in Arizona includes a Power of Sale clause that goes into effect upon the homeowner’s nonpayment of their loan after the minimum 91 days .This clause is what allows a trustee to foreclose and sell the property on behalf of the lender or Mortgage Company. This very specific language is what allows for a non judicial foreclosure verses a judicial foreclosure. Legally, foreclosure sales must take place during normal business hours, Monday thru Friday excluding legal holidays at the location referenced in the Notice of Sale. The trustee will auction the property to the highest bidder. A cashier’s check is made out to the trustee prior to the time of the sale. The highest bidder, investor or third party must have all funds in cash to buy the property the next business day. The successful bidder will receive a trustee’s deed upon the full cash payment. If there is no winning bidder on the property, then the property reverts back to the bank or mortgage holder. Still have questions about the Phoenix real estate market? We are here to help and service our buyer's and seller's needs. Our real estate agents are very experienced and knowledgeable with distressed properties and all facets of the real estate industry. Please take a moment to fill out the form below and one of our real estate professionals will get back to you promptly.

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