Many people are familiar with the popular term “mortgage” as it pertains to an agreement between a borrower and a lender. However, deeds of trusts are far more common than mortgages. In Arizona, property loans are secured by deeds of trusts.
What’s the Difference Between a Deed of Trust and a Mortgage?
A mortgage is a direct agreement between two parties: borrower and lender. The property the mortgage is under then stands as collateral in the event that the borrower defaults. If the borrower becomes delinquent, the lender is the one to foreclose the property and sell it at auction. Foreclosures of mortgaged properties are always judicial. This means that the borrower must go to the court and request permission to execute the foreclosure process in Arizona.
Deeds of trusts are like mortgages, but include a third party: the trustee. In a deed of trust agreement, the trustee holds the title to the property. In the event that the borrower defaults, the lender orders the trustee to enact a foreclosure. Properties under deeds of trusts are foreclosed non-judicially.
How to Foreclose a Property with a Deed of Trust in Arizona
If an individual borrowed money to buy a home in the state of Arizona, that property is secured under a deed of trust, and is therefore subject to a non-judicial foreclosure should the need arise. Non-judicial foreclosures are usually cheaper, faster, and easier for lenders. However, lenders must follow compliance guidelines closely, or borrowers will have grounds to take legal action, resulting in potentially devastating losses for lenders.
In the pre-foreclosure and notice of sale stages, lenders must follow the mandated procedures at the correct frequency. A copy of the notice must be published, posted, and oftentimes served to the Trustor. Junior lienholders must be notified.
When the lender is ready to sell, they must sell at the date and time specified in the NOS or the agreed postponed date. The borrower has the right to redeem. Lenders also have the possibility of getting a deficiency judgment.
Foreclosure is complicated, and lenders facing a non-judicial foreclosure should rely on experts to do the heavy lifting, keep their assets safe, follow compliance laws, and keep lending teams focused on their customers. Lenders can rely on Total Lenders Solutions to work hand-in-hand with teams during the foreclosure process to avoid the 4 common delays.
Keep Your Team Educated About Foreclosure Law
At Total Lender Solutions, we advocate for lenders looking to maximize recoveries on defaulted loans. For over 15 years, our team of highly experienced real estate professionals and legal experts has transformed complicated processes into clear resolutions for institutional and private lenders. We work as a vigorous extension of your team to provide comprehensive solutions and seamless communication, from pre-foreclosure and notice of default to the final sale phase. Our dedication and persistence when it comes to the foreclosure process ensures that our clients feel confident in reaching a successful outcome. Contact us today.