Understanding the Foreclosure Process in Arizona

It's critical for both homebuyers and mortgage holders to comprehend the whole process, including pre-foreclosure, as millions of homes throughout the nation enter foreclosure.

To navigate your own house foreclosure, it's crucial to comprehend the Arizona foreclosure procedure.

Before we start,

So what is a pre-foreclosure in Maricopa?

Many homeowners across America and Maricopa are facing difficulties making their monthly mortgage payments.

When a homeowner misses 3-6 months of mortgage payments, the lending institution will issue a warning, notifying the homeowner to pay or lose their home. This period is known as “pre-foreclosure.”

Banks and mortgage lenders typically provide three months for the homeowner to become current. Of course this number can vary by bank and situation sometimes.

If a homeowner fails to make the necessary payments, the bank will foreclose on the home, assuming ownership, and evict the homeowner. Thankfully, during this stage of the foreclosure process, a mortgage holder has the opportunity to take advantage of several options to prevent losing their home.

Pre-foreclosure Options for Borrowers

If you’re behind on mortgage payments, you’re likely to receive a “notice of default” from your mortgage lender.

This document will state that you have not made mortgage payments for the last 90-180 days. It’s important not to panic.

You have options that can delay or even prevent losing your home:

If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, receiving lower monthly payments. Check with your local Maricopa mortgage broker… or contact us and we can connect you with a reputable one.

You may be able to quickly sell your home to a real estate investor that’s reputable in Maricopa like us at Diversified Real Estate Solutions, using the cash acquired to pay the months of back-payments owed (or we *may* be able to work out something with the lender that relieves all or part of your back payments. We can buy your Maricopa Arizona area home quickly, often in just a week or two, will pay in cash, and takes the stress out of trying to find a buyer.

You can contact the bank and ask them to permit a short sale. In a short sale, you’ll sell your home for less than it’s worth, and the bank will take the loss as a tax write-off. In some short sales you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan.

You may be able to declare bankruptcy, which can buy you time to pay your debt. Bankruptcy will remain on your credit report for years, and can cause significant damage.

Lenders are very much aware of the widespread financial troubles across the country and they’re willing to work with borrowers a lot of the time.

If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least salvage your credit rating.

A foreclosure can often negatively affect your credit score by 200-400 points and can prevent you from obtaining a loan of any sort for 5-7 years, so be very dutiful if you’ve received a Notice of Default from your lender.

But if you’re not able to find a solution with your lender working directly with them… connect with us. We may be able to help.

Ways We Can Help If You’re In Pre- Foreclosure

We can potentially help with a short sale – Submit your info on this website so we can evaluate your situation to see if we can help.

We can buy your Maricopa area house – We buy houses in Maricopa and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>

You can ask us questions and we can provide you FREE guidance and resources so you can make a well educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch.

If you’re in the pre-foreclosure stage… you’ve still got time to fix this situation.

Just connect with your bank to see if they’re willing to work with you… or contact us if you’d like to see what we can buy your house for or to tap into our free foreclosure foreclosure resources.

 What is foreclosure?

Foreclosure is the legal process that lenders use to take back property securing a loan, generally after the borrower stops making payments.

Foreclosure is no fun. But just know that it’s not the end of the world.

When you know how foreclosure in Arizona works… it arms you with the knowledge to make sure you navigate it well and come out the other end as well as possible.

The Basic Stages of A Foreclosure

There are a few stages that are important to any foreclosure process.

Foreclosure works differently in different states around the country.

The two ways different states use to foreclose upon a property are: judicial sale or power of sale.

Connect with us by calling 480-650-2709 or through our contact page to have us walk you through the specific foreclosure process here locally in Maricopa.

In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.

Under Judicial Foreclosure:

Your mortgage lender must file suit in the court system.

You’ll get a letter from the court demanding payment.

Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).

If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.

Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.

Under Power of Sale (or Non-Judicial Foreclosure):

·        The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.

·        After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.

·        The trustee can then sell your property to the lender at a public auction (notice must be given).

Anyone who has an interest in the property must be notified during either type of foreclosure.

For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.

What Happens After A Foreclosure Auction?

After a foreclosure is complete, the loan amount is paid off with the sale proceeds.

Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.

A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.

Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.

Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.

Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Diversified Real Estate Solutions to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.

Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.

If you need to sell a property near Maricopa, we can help you.

We buy houses in Maricopa Arizona like yours from people who need to sell fast.

Give us a call anytime 480-650-2709 or
fill out the form on this website today! >>