Arizona Foreclosure Laws

In Arizona, foreclosure properties can take place judicially as well as non-judicially. The normal time for completion of foreclosure proceedings out of court is 3 months and it is taken into consideration from the filing day of the notice.

Period of Pre-foreclosure

In Arizona judicial foreclosures, the lender has to file for a foreclosure in the court and has to record the notice for a pending lawsuit also known as the Lis Pendens. The lender has to also file the amount of debt and the default amount in the court. Notification is sent to the homeowner under scrutiny for loan default and lien holders if any. They can be notified through publishing in the newspaper or they can be informed about the notice. The court sets a time frame for the borrower or homeowner to respond in and if the borrower is unable to respond within the stipulated time then the court rule will go against them. This means that the court will direct the sheriff of the county where the property is located to sell or auction the property so that the loan or debt amount can be recovered.

In an Arizona non-judicial foreclosure, the sale can take place on just one condition. The condition is that the deed of trust should mention that the lender is permitted to hold a public auction of the property after the owner or borrower defaults on the loan. In non-judicial foreclosures, the trustee needs to record his notice of sale before the auction can take place. The sale or auction will take place only three months from the time when the notice was recorded. The borrower has the power to stop the foreclosure before 5:00 p.m., a day prior to the auction/sale but he/she can do so only after paying the amount of debt owed.

Sale / Auction Notice

In Arizona, all judicial foreclosures have to be conducted by the sheriff. There is a timeline for conducting the sale and the auction can happen 45 days from the time when the county clerk of the state of Arizona gives permission for the auction. The property can be sold only through a public auction and open to all. The Sheriff should receive the final price ideally before 5:00 p.m. on the next day. Once the sale is complete, the Sheriff issues a “property is sold” certificate.

Properties, which are not abandoned, can be redeemed within a period of 6 months. The 6 months are taken into consideration from the day when the property was actually sold. If due to circumstances, the borrower is unable to take advantage of the situation then a secondary lender can redeem the property. To redeem the property, the homeowner will have to pay the amount of loan owed and some additional fee. The sheriff can also transfer the ownership of the Arizona foreclosed property to the person who has won the bid but this can happen only when no one is there to redeem the foreclosed property.

If it is a non-judicial trustee’s sale, then the sales notice needs to contain the description of the property along with important details like the date of auction, the time and the venue. The notice needs to be recorded and it is the responsibility of the trustee to mail the recorded notice to the parties in question three months prior to the date of auction/sale. There is another condition attached to this and it states that the notice needs to be published once every week in the local newspaper for four consecutive weeks, and last notice will be published at least 10 days prior to the date of sale.

If you need more information about Arizona foreclosure laws, you should contact a foreclosure lawyer, or contact us so we can recommend one for you.

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