Arizona Foreclosure Laws

In Arizona, both judicial and non-judicial foreclosures are permitted. Non-judicial foreclosures typically take at least three months from the filing of the foreclosure sale notice to the actual foreclosure sale.

Judicial Foreclosures in Arizona

Judicial foreclosures start when the lender files a Lis Pendens, or notice of a pending lawsuit and files for foreclosure in a court. When this occurs, the filing includes information about the default amount and the total mortgage or debt amount. Any junior lien holders and debtors are alerted of the pending suit. The borrower has a chance to respond to the suit, but if he or she does not, the court may rule in favor of the lender and set the owed amount. The county sheriff is then advised by the county clerk to conduct a sale of the real estate for the amount owed.

About 45 days after this, the sheriff will usually hold the foreclosure sale. In Arizona, foreclosure auctions are open to the public. The highest bidder must pay the bid price by 5:00 pm the day after the foreclosure sale and a certificate of sale is given to the bidder. The redemption period of all non-abandoned properties in the state is six months. If the property is not redeemed by the debtor, secondary lenders are also given an opportunity to do so. If the property is not redeemed, ownership is transferred to the winning bidder.

Non-Judicial Foreclosures in Arizona

If a clause in the trust deed allows the lender to sell the property in the event of a default, a non-judicial foreclosure is possible. In this foreclosure process, the trustee begins the process by recording a notice of sale. At least three months after this notice, the sale can occur. In Arizona, the home is in pre-foreclosure and foreclosure can be stopped in a non-judicial foreclosure until 5:00 p.m. of the day before the foreclosure sale.

The notice of sale contains information about the place, date, and time of the sale as well as a description of the property being sold. Once the notice of sale is recorded, the trustee mails the documents to all parties affected by the foreclosure. This must take place at least three months before the date of the sale. For four weeks before the sale, the notice must also appear in a local newspaper at least once a week. The final published notice must appear in the newspaper at least ten days before the sale date. In addition, the notice of sale must be posted in the county courthouse and on the property itself at least twenty days before the sale date. From the day before the sale up to the time of the sale, anyone who asks the trustee the opening bid must be given this information by the trustee. If the trustee refuses to divulge this information, the sale date may be pushed back.

The sale takes place at the trustee's office, the property, or the courthouse and is conducted by the trustee or by an agent of the trustee. To place a bid, bidders must offer a deposit of $10 000, which is refundable. The winning bidder's deposit is kept by the trustee. The winning bidder must pay the bid price by 5:00pm on the day after the sale and when this happens, the trustee transfers the ownership of the property to the bidder within seven days. On non-judicial foreclosures in Arizona, there is no right of redemption.