Arizona’s foreclosure laws are spelled out in Article 33, Chapters 6, 6.1 of Arizona Revised Statutes. These laws are very specific in spite of the fact that most Arizona foreclosures are done through a non-judicial procedure. Non-judicial foreclosure proceedings typically mean that the original mortgage contract contains a clause that allows a lender to seize the property and sell the property, more commonly known as a power of sale clause.
Foreclosure time frames
Once a homeowner has received a foreclosure notice, it typically takes about four months for the foreclosure process to be complete. The process may be further delayed if the homeowner contests the foreclosure or if they file for bankruptcy. During this four month period, the lender has to advertise the property for sale as explained in the Arizona Revised Statutes.
Homeowners have the right to contest the foreclosure process. This may be done by filing a claim at the courthouse and requesting that the lender provide the loan documents as proof that they have the authority to foreclose. This is fairly common since many banks and lending institutions may have been using robo-signers and may not have immediate access to the mortgage documents.
Homeowners may also file for bankruptcy protection which automatically grants a stay preventing the lender from foreclosing. Chapter 13 bankruptcy allows the homeowner to reorganize their debt allowing them the opportunity to repay the amounts that are past due.
When a lender has filed the proper documents with the county showing that they intend to foreclose on the property, they have an obligation to advertise the sale. Typically, trustees are appointed to oversee the foreclosure and the foreclosure sale. Advertising must be done in a widely distributed newspaper for specific periods of time. Arizona foreclosure laws state that the lender must post a notice at least one time each week for the four weeks prior to the foreclosure sale. In addition, a notice must be placed at the property at least 20 days prior to the sale.
Rights of redemption
Under Arizona’s foreclosure laws, homeowners do not have any redemption rights. While some states allow a homeowner to pay off the full amount of the mortgage owned as well as any associated costs for a period of time after a foreclosure sale, Arizona Revise Statutes do not have any allowance for this process.
While Arizona does allow a lender to file for a deficiency judgment, there are very specific circumstances where they would be granted. Loans on properties that have more than 2.5 acres of land, are single or two family homes are eligible for deficiency judgments. Lenders have only 90 days after a foreclosure sale to sue for a deficiency judgment, only the difference between the loan amount and the fair market value are eligible.
Arizona’s foreclosure laws are somewhat confusing and while they may seem to favor lenders, they are designed to help homeowners as well. For an Arizona homeowner who is facing foreclosure, it is important to have an understanding of the basic laws. In addition, those who purchase foreclosed properties should also be aware of the basic laws.