Arizona Foreclosure Law

Arizona Foreclosure Laws

Arizona foreclosure law has provisions for both judicial and non-judicial foreclosure processes.  However, typically only non-judicial foreclosure is used.  Only in rare circumstances is it necessary to use a judicial foreclosure.  In a judicial foreclosure the lender must sue the borrower to obtain a court order for the sale and a decree of foreclosure.  In Arizona, the judicial foreclosure method is only used in the event that a Power of Sale stipulation or clause is not included in the mortgage contract or deed.

According to Arizona foreclosure law, for a non-judicial foreclosure the trustee for the property must file a Notice of Sale with the county where the property is located.  Within a five-day period of the notice being filed a copy must be mailed by certified mail to all parties who are listed on the deed of trust.  In addition, the trustee is required to publish in the newspaper at least weekly a copy of the notice for a minimum of four consecutive weeks prior to the sale.  The final notification for the newspaper must run a minimum of 10 days before the date of the sale.

In addition, in a foreclosure process in Arizona the trustee is allowed to place a copy of the notice on a conspicuous part of the property if a breach of the peace is not a possibility.  In addition to placing a copy of the notice on the property, the trustee may also place a copy of the notice at the local courthouse that has jurisdiction over the property. 

In order for the sale to be complete, the property must be sold to the highest bidder.  The high bidder has until 5p.m. the following business day of the sale in order to pay cash for the property.  However, if the highest bidder fails to bring the cash payment the sale may be continued until another date and time that is also made public by a public declaration and by the trustee.  However, the trustee does have the option of offering the property to the second highest bidder. 
In Arizona, typically the lenders will bid on the property in the amount of the balance due plus costs associated with the foreclosure.  This would allow the lender to retain the property and sell it later at a higher price.  Upon successful completion of the sale, the buyer is given a trustee’s deed for the property.

In Arizona, foreclosure law a deficiency judgment is not allowed if the property is less than 2.5 acres in size, or if the home is a single or two-family property.  A deficiency judgment can be sought if the property is larger than 2.5 acres, or if it is a commercial or multi-family unit.

For more information on Arizona foreclosure laws click here.

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