In Arizona, there are two types of foreclosure: judicial and non-judicial. Most foreclosures in the Grand Canyon State fall into the latter category. Here are a few basic things that lenders need to know about non-judicial foreclosure in Arizona.
Non-Judicial Foreclosure in Arizona: How It Benefits Lenders
Similar to non-judicial foreclosures in other states, lenders benefit from non-judicial foreclosure in Arizona in several ways. First and foremost, courts stay out of the process. If the borrower defaults on the loan, lenders can begin a foreclosure by engaging a property trustee to record a notice of sale. The lender is not required to get permission from the courts to sell the foreclosed property to recover any losses from the default. Keeping the process out of the courtroom expedites the process and keeps costs down – in Arizona, the process can take as little as 91 days. In addition, in Arizona borrowers have no post-sale right of redemption following a non-judicial foreclosure; and may be liable, in limited circumstances, for a deficiency judgment (if the sale proceeds are insufficient to pay off the loan) after a non-judicial foreclosure is completed.
Important Steps for Lenders in Non-Judicial Foreclosure
Arizona foreclosure laws are extremely complex. Lenders can reduce their exposure by making sure that they follow the state’s requirements. Adhering to the steps in the process is crucial.
Once a loan goes into default for either a monetary or non-monetary breach, the foreclosure starts with the preparation and recording of a statement of breach. In addition, a notice of trustee’s sale is filed with the county recorder. The notice will include the date, time, and location of the foreclosure sale. The sale date can’t be any sooner than the 91st day after the notice of sale’s recording date. The notice of sale is sent by certified mail to the borrower within 5 days after the recording date. In Arizona, the borrower has the rights to either pay the loan off or to reinstate the loan – that is, to bring the loan current by making all overdue payments and associated fees – until 5:00 PM on the last business day before the date of sale. If the borrower fails to do so, the property can be sold at auction to the highest bidder.
At Total Lender Solutions, we advocate for lenders looking to maximize recoveries on defaulted loans. For over 16 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.
