Foreclosure - Or Just Need Out?

Sometimes "Life Happens". Should you find yourself facing foreclosure, To have insight into the general processes and time frames will help the "Fear of the Unknown". 

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Foreclosure Process


1. Do loan documents determine a provision for borrower to cure default on pending foreclosure? (Such as provision in the Deed of Trust requiring at least a 30 day "Demand Letter" notice prior to acceleration of the debt prior to commencing the 91 day trustee's sale proceeding).

2. Understanding the The Deed Of Trust - 3 Parties: (1) Trustor - Property Owner and typically the borrower (2) Trustee - Attorney, Title Company, (whoever is assigned security interest in the Title for repayment or performance of the obligation).  (3) Beneficiary - The Lender whom performance of obligation is owed. The Trustor remains in possession of property, with "equitable interest (title). In the event of default, the Trustee (Attorney, Title company) files a Notice of Trustee Sale as directed by Beneficiary (Lender). The Trustor remains in possession, enjoying equitable title to the property. In the event of default, the trustee conducts a nonjudicial sale as directed by the beneficiary.

3. Reinstatement requires the CURE of both monetary AND non-monetary defaults.

4. Foreclosure Procedures options: Judicial and nonjudicial. A judicial foreclosure of a deed of trust may commence at any time before the property is sold at the trustee’s sale. A.R.S. § 33-813(A).

5. Arizona’s non-judicial Statutes do NOT require the beneficiary of the deed of trust to prove its authority or show possession of the original promissory note prior moving forward with a non-judicial foreclosure.

6. Judicial foreclosure is often selected in cases where borrower (Trustor) is chronically delinquent. 

7. Reinstatement will prevent a subsequent filing of a judicial foreclosure if done before judicial foreclosure action is filed.

8. Where the foreclosure is by Trustee Sale (nonjudicial), Deficiency is established by subtracting the "fair market value" at date of sale (or sales price, if greater) from the total debt outstanding.

9. Notice of Sale: non-judicial - Also known as “Notice of Trustee Sale” contains such information as: (1) the Date, Time, and Address of sale. (2) The Address of Property A.R.S. § 33-808 (OR reference to pages in the County Recorders Index) and description of property. (3) Original Principal balance shown on Trust Deed. (4) Name and address of Beneficiary (Lender) and Trustee (attorney or Title Company). (5) Name/Address of original Trustor (Owner) on Deed of Trust. (6) Telephone contact number for Trustee (attorney or Title Company.

10. WITHIN 5 DAYS of Recording Notice of Trustee Sale: Notice of Trustee Sale mailed to Trustor (Owner). "Non" recorded Notice of Trustee Sale can be mailed to all other parties on the Trust Deed A.R.S. § 33-809(C).

11. The Notice of Trustee Sale is published once per week for 4 consecutive weeks. The last publication date - no later than 10 days prior to the Trustee sale date A.R.S. § 33-808(A)(4). 

12. REINSTATEMENT: The Trustor (Owner), the "Successor in Interest", or any party who has a subordinate lien may reinstate the debt as long as it is before 5 p.m. (Mountain Standard Time) on the last business day BEFORE the date of sale. (Weekends and Holidays excluded). Reinstatement does not have to be accepted if submitted the day of sale.  

13. The person conducting the sale may, “for any cause considered in the interest of the beneficiary or trustor,” postpone, or continue the sale. A.R.S. § 33-810(B). There is no restriction on the number of Continuances, but each one must be less than 90 days in length.

14. Sale Proceeds: Sale proceeds are paid in this order: First, to costs and expenses of the sale itself, including trustee and attorney fees, should there be any. Second, the debt the deed of trust secured. Third, other “obligations” secured by the deed of trust, Forth, any “HOA” who may have a subordinate lien. Fifth, any final ,“Junior” liens, or encumbrances in order of priority. Lastly, to the trustor (the owner at the time of trustee sale). As an alternative, within a 90 day period from date of sale, the trustee may choice to deposit the remaining sale proceeds with the County Treasurer where the sale took place and notify all parties of record. Parties of record with an interest in the proceeds may then file an application in the civil action where the funds are deposited A.R.S. § 33-812(C), (F), (I), (G).


LEGAL DISCLOSURE

We are not a debt relief agency and we do not help people file for Bankruptcy Relief under the Bankruptcy code. We do not provide Bankruptcy information, or foreclosure advice, Debt relief service, counseling, document preparation, bankruptcy filing, or legal representation related to an existing or perspective bankruptcy, or foreclosure. 

If you want bankruptcy or foreclosure advice, please consult an Attorney. If you want debt relief service, please consult a debt Relief Agency. Any written or oral statements we may give to you about bankruptcy or debt relief service are our opinion only. 

We are not lawyers, or a Debt Relief Agency, nor do we help people with Bankruptcy filings, and cannot give you competent legal advice about Bankruptcy or foreclosure.