Arizona Foreclosure Laws

Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: Yes
Security Instruments: Mortgage, Deed of Trust
Right of Redemption Period: None
Deficiency Judgments Allowed: Varies
Time Frame: Typically 90 Days
Public Notice: Notice of Sale

Arizona operates as a title theory state, which means that a property title remains in trust until full payment of the loan is attained. In Arizona, a title can be secured by either a mortgage or a deed of trust, with deeds being the more common method. A deed of trust is also referred to as a trust deed in Arizona.

Lenders in Arizona may choose to foreclose either through judicial foreclosure or non-judicial foreclosure. However, the state primarily employs the non-judicial foreclosure method. Non-judicial foreclosures are faster and more cost efficient than judicial foreclosures.
In Arizona, a deficiency judgment is not allowed if the property is less than 2.5 acres in size or if the property is a single or two-family home. However, a deficiency judgment may be sought if the property exceeds 2.5 acres or if it is a commercial or multi-family property.

Types of Foreclosures Allowed in Arizona
Judicial Foreclosure

Arizona statute permits judicial foreclosure, which is also known as foreclosure by judicial sale. This type of foreclosure involves selling the defaulted property under court supervision in the event that no power of sale clause is present in the mortgage or deed. The lender can choose to either file a lawsuit against the mortgagor or sell the property to the highest bidder.

Non-Judicial Foreclosure

Arizona also allows for a non-judicial foreclosure, which is also known as foreclosure by power of sale. In order for non-judicial foreclosures in Arizona to be possible, the loan documents must contain a power of sale clause, which authorizes the lender to sell the property in the event of default to be able to recover what is owed.

The difference between non-judicial foreclosures and judicial foreclosures is that non-judicial foreclosures allow for the property to be sold without court supervision. This type of foreclosure process is usually much faster and less expensive than a judicial foreclosure. However, action requires a notice known as foreclosure by advertisement.

There are two ways in which a non-judicial foreclosure in Arizona can proceed. If the power of sale clause states a specific time, place, and outlines terms of sale, then the lender must follow the procedure that is stated. If there is no specification, then the following must occur:

1. Before the foreclosure is initiated, the lender must publish a notice of sale date in a newspaper that currently circulates in the county where the property is located. The notice must be published at least once a week for four (4) consecutive weeks. Within twenty (20) days of the proposed sale, a notice must be posted at the actual property and a notice of the proposed sale must also be recorded where the trust property is located.

2. The notice must contain certain criteria, including the date, time and place of the sale, description of the defaulted property, the county tax assessors parcel number, the original principal balance that is referenced on the trust deed or mortgage, and the names of the beneficiary (or lender) and trustee.

3. Sales must occur between 9 a.m. and 5 p.m. every day except for Saturdays or a legal holiday at the specified date, time and place that is designated in the notice of sale for public auction. The property will be sold to the highest bidder, which may include the lender. Bids must be in cash, except for lenders, which may issue credit bids. The sale may be postponed for ninety (90) days.

4. The sale may not occur before ninety (90) days from the date of the foreclosure filing and no less than ten (10) days from the date of the last notice publication.

Working with a Foreclosure Lawyer in Arizona

Although receiving a notice of default may be frightening, help is readily available to all homeowners in Arizona. If you have received a foreclosure notice or have been behind on your mortgage payments, seek the help of a top foreclosure attorney in Arizona immediately to prevent your home from being repossessed.

Foreclosure lawyers work diligently to ensure that you do not lose your home. Your paralegal will speak to your lender and try to work out a plan that does not involve seizing your property. Your foreclosure lawyer may suggest mortgage modification, short sale, deed in lieu, or even a temporary stop in payments as an alternative to foreclosure.

Regardless of whether you are behind on your mortgage because of a pay cut, job loss or even medical bills, foreclosure attorneys can help protect your rights and prevent your home from being repossessed. Contact the office of a leading team of foreclosure lawyers in Arizona right away to fight for your rights and protect your home.