 Arizona Loan Modification Guidelines
When you develop a definite plan of action with well-timed, well-informed
steps, you can stop the foreclosure process and save your home. We have
outlined the foreclosure process for the state of Arizona.
Judicial foreclosure available: Yes
Non-judicial foreclosure available: Yes
Trustee
A trustee may conduct the foreclosure sale out of court under a power
of sale clause if the borrower defaults on the loan. Alternatively, a trustee
(or the lender) may sue to foreclose. A trustee may also sue the borrower
for physical abuse to the property, waste, or other impairment of the security,
but only so long as the borrower was in possession or control of the property
when the damage was done. The trustee cannot conduct a foreclosure sale
under the power of sale clause until a lawsuit to foreclose is dismissed.
Under Arizona law, a bank, trust company, Savings & Loan or other institutional
lender can be a trustee. Arizona licensed attorneys, real estate brokers,
and insurance agents can also be trustees. The lender for any reason may
appoint a substitute trustee if they record a Notice of Substitution of
Trustee and mail a copy to the borrower. A trustee may resign by recording
a Notice of Resignation of Trustee.
Preliminary Notices
Contents
The trustee will give written notice of the time and place of sale including
legal description of the property, by each of several methods.
Recording
The trustee must record a notice of the sale in the county recorder's
office in the county where the property is located.
Advertising
Once a week for four consecutive weeks, the notice must appear in a newspaper
in the county where the property is located. The last notice must be published
not less than ten days prior to the date of the sale.
Posting
(1) If it can be done without a breach of the peace, the trustee can post
the notice at least 20 days prior to the date of the sale, in some conspicuous
place on the property to be sold. (2) He or she can post the notice at
the courthouse or at a specified place at the place of business of the
trustee in the county in which the property is located.
Mailing
The trustee or lender must mail, within five days after recording the
notice of sale, by certified mail, a copy of any notice of sale to each
of the persons who are parties to the trust deed except the trustee. It
must be addressed to the mailing address specified in the trust deed. The
notice must set for the nature of the borrower's breach or nonperformance
under the trust deed. In addition, any person will be entitled to receive
a copy of the trustee's foreclosure notice if such a person records a statutory
Request for Notice form.
Special Procedure
For a fee up to $20, the trustee can provide information on the unpaid
balance, the name and address of the owner, the date the trustee's notice
was recorded and a list of encumbrances. A trustee must honor a written
request, and may honor an oral request.
Sale Procedures
Time and Place
The time and place of the foreclosure must be designated in the notice
of sale.
Manner of Sale
The trustee or the trustee's agent must conduct the sale. The sale is
for cash to the highest bidder, except that the lender can make a "credit
bid," which means to cancel out some part (or all) of the money the
borrower owed the lender on the lien, instead of paying cash. A successful
high bidder must pay the bid price by 5p.m. of the day after the bid, other
than a Saturday or legal holiday. Every bid is an irrevocable offer until
the sale is completed, which happens when the bidder pays the bid price
to the trustee's satisfaction. If the high bidder fails to make the payment
by 5:00 p.m., the day after being notified of the option to buy, then the
trustee may postpone the sale.
Postponement
The trustee may postpone the sale to another time, or another place, by
giving notice of the new date, time and place by public declaration at
the last place and time the property was offered for sale. No other notice
is required. A trustee may also, by written agreement, extend the time
for a buyer to come up with the payment.
Post-Sale Matters
The sale proceeds will go to the payment of the obligations secured by
the trust deed that was foreclosed, then to junior lien holders in order
of their priority. The successful bidder gets a trustee's deed, which constitutes
conclusive evidence that the trustee conducted the foreclosure sale property.
Deficiency
An Arizona deed of trust permits the real estate that is the collateral
for a loan to be sold at a foreclosure sale by a trustee. The proceeds
of the sale will be paid to the lender, or the lender can take title to
the property and cancel out the debt in exchange for the deed, called a "credit
bid." Under a new Arizona law, a lender may not bring a subsequent
deficiency suit against a person who lost a property that is 2.5 acres
or less at a foreclosure, provided the property was a single one-family
or a single two-family dwelling. This is so even if the high bid at foreclosure
was less than the balance due on the loan. In foreclosures against other
types of property, a deficiency is limited to the difference between the
balance owed and the fair market value of the property, and then only if
the suit is brought within 90 days of the power of sale foreclosure.
Redemption
Arizona does not recognize a subsequent right of redemption on foreclosure
sales.
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