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Foreclosure Timeline In Arizona



There  are two methods that a Lender can use to foreclose on a property when its Borrower defaults, usually when the Borrower fails to make the monthly payments to the Lender. Those methods are (i) a non-judicial process, and (ii) a judicial process.  In regard to residential real estate the judicial process is rarely utilized.

The right given to the Lender to utilize the non-judicial process is found in the language of the Deed of Trust. That right is known as the “power of sale”.  The “power of sale” is the clause in the Deed of Trust where the borrower pre-authorizes the sale of the property to pay off the balance on the borrower’s loan in the event of the borrower’s default.

Once the Lender determines that the borrower’s default ,will not or can not be cured by the borrower, the Lender will usually send the Trustee a “Declaration of Default”. The Declaration instructs the Trustee to prepare and record a “Notice of Default” and if necessary sell the property. The Declaration of Default is not recorded and generally remains with the Trustee in the Trustee’s foreclosure file.

Upon receipt of the Declaration of Default and the Trustee’s compliance with Arizona law requiring notice to the Borrower, the Trustee will record a “Notice of Default” with the Recorder of Deeds in the County in which the property is located. There are requirements imposed on the Trustee relating to (i) the publication of the Notice of Default, (ii) the mailing and posting of the Notice on the property.

The Notice of Default will set a date for the Trustee to sell the property at public auction.  The Notice must be recorded at least 91 days prior to the sale date.

The Borrower can cure the default and avoid the sale by paying the amount not paid when it was due plus certain fees and costs. This right to cure the default must be completed by 5PM on the last day before the scheduled date of the Trustee’s Sale. When that amount has been paid the Borrower’s loan is reinstated and the Trustee’s Sale is cancelled.

Arizona passed a new law which became effective on July 30, 2010 which, in certain cases, requires the Lender to “attempt to contact” the borrower at least 30 days before the Notice of Default is recorded. The purpose is to have the Lender explore with the Borrower options that might avoid the foreclosure process.

The process described above is a generalization intended to alert the reader. The Non-Judicial Foreclosure process is very technical. A home owner facing the prospect of a Trustee’s Foreclosure Sale should seek immediate legal advise from an Attorney who has experience in representing Borrowers in regard to Trustee’s Sales. This information is not intended to provide legal advice, it is only intended as a general overview of the process