Foreclosure: The Basics

Foreclosure happens when a homeowner loses possession of his/her real estate property. This is a legal process that allows a lender to reclaim a property from a borrower who has defaulted on mortgage payments. In Arizona, like in many other states, a lender must follow a set of legal procedures to carry out a foreclosure. Such procedures protect both the borrower’s rights and the lender’s ability to recover their investment.

Types of Foreclosure

In Arizona, there are two primary types of foreclosure: judicial and non-judicial.

  • Judicial Foreclosure: This process involves the lender filing a lawsuit in court to obtain a judgment allowing the property to be sold to recover the debt. The court oversees the entire process to ensure fairness and adherence to the law.
  • Non-Judicial Foreclosure: In Arizona, the foreclosure process is typically non-judicial, meaning it doesn’t require court involvement. It’s often referred to as a “power of sale” clause. Here, the lender follows specific steps outlined in the mortgage contract to auction off the property without court involvement. This clause grants the lender the authority to sell the property in the event of default. The timeline can vary, but generally, the lender must wait at least 90 days from the filing of the notice of default before proceeding with the next step.


Judicial Vs. Nonjudicial Foreclosures in Arizona

Here’s a chart outlining the key differences between judicial and nonjudicial foreclosures specifically in the state of Arizona:

Aspect Judicial Foreclosure Nonjudicial Foreclosure
Initiated by Lender or creditor Lender or trustee
Involves court process? Yes No
Typical in Arizona Yes Yes
Timeline Longer and more complex Typically quicker
Parties involved Borrower, lender, court Borrower, lender, trustee
Right of redemption Available in some cases Rarely available
Sale location At a public auction Typically at trustee’s office
Deficiency judgments Allowed Limited or not allowed
Notice requirements Strictly regulated State-specific

Please note that this chart is specific to Arizona and is a general overview of the main differences between judicial and nonjudicial foreclosures in the state. Foreclosure laws and procedures can vary significantly from state to state, so the specifics may differ based on your location.

Timeline of Non-Judicial Foreclosure

Understanding the timeline of a non-judicial foreclosure in Arizona is crucial for homeowners. Here’s a simplified breakdown:

  • Notice of Default (NOD): After missing a certain number of mortgage payments (usually around 120 days), the lender records an NOD with the county recorder’s office. The notice of default is a formal document that informs the homeowner that they are in default on their mortgage payments. This notice is a critical step as it marks the official start of the foreclosure process. According to the law, the notice of default must include information about the amount owed, the deadline for payment, and the consequences of failing to remedy the default.
  • Notice of Trustee’s Sale: If the borrower doesn’t bring the loan current within the 90-day period, the lender records a Notice of Trustee’s Sale (NOTS). This notice sets the date and time of the foreclosure sale, which usually occurs around 21 days after the NOTS is recorded.
  • Trustee’s Sale: After the waiting period, the lender can schedule a trustee’s sale, also known as a foreclosure auction. During this sale, the property is auctioned off to the highest bidder. It’s crucial to note that Arizona law requires the trustee’s sale to be publicly advertised for at least twenty days before the sale date. This provides potential buyers and the homeowner with an opportunity to participate. The winning bidder receives a Trustee’s Deed upon payment, transferring ownership of the property.

Homeowner’s Rights and Options

Arizona law offers some protections and options for homeowners facing foreclosure. Homeowners have the right to cure the default by paying the overdue amount and any associated fees before the trustee’s sale. Additionally, homeowners can request mediation, which can provide an opportunity to negotiate with the lender and potentially explore alternatives such as:

  • Reinstatement: You can reinstate your loan by paying the entire amount owed, including missed payments, fees, and legal costs, before the foreclosure sale.
  • Loan Modification: You may negotiate with your lender to modify the terms of your loan, potentially reducing your monthly payments.
  • Short Sale: With your lender’s approval, you can sell the property for less than what you owe on the mortgage.
  • Deed in Lieu of Foreclosure: You can voluntarily transfer ownership of the property to the lender to avoid foreclosure.

Foreclosure Do’s and Don’ts


  • Seek Assistance Early: When you realize you’re struggling with mortgage payments, don’t wait. Reach out to your lender as soon as possible. They might be open to negotiations, loan modifications, or forbearance arrangements to help you stay in your home.
  • Understand the Process: Arizona follows a non-judicial foreclosure process, which means court involvement isn’t required for the foreclosure to proceed. However, this process has specific steps and timelines that lenders must adhere to. Understanding these steps can help you anticipate the process and make informed decisions.
  • Review Your Loan Documents: Your mortgage agreement contains vital information about your rights and obligations during foreclosure. It’s essential to understand what actions trigger default and foreclosure, along with any specific requirements for notice.
  • Respond to Notices: If you receive a notice of default from your lender, take it seriously. This is the initial step in the foreclosure process, and it’s not a time to ignore correspondence. Ignoring notices could expedite the foreclosure process.
  • Explore Loss Mitigation Options: Arizona law mandates that lenders offer borrowers the opportunity to explore loss mitigation options, like loan modifications or repayment plans, before moving forward with foreclosure. Take advantage of these options to potentially save your home.


  • Ignore Notices: Failing to respond to notices from your lender can accelerate the foreclosure process. Ignoring these notices won’t make the situation go away and might limit your chances of negotiating a solution.
  • Avoid Communication: Open lines of communication with your lender. If you’re unable to make payments, communicate your situation honestly. Lenders may be more willing to work with you if you’re proactive about finding a solution.
  • Disregard Scams: Unfortunately, some individuals may attempt to take advantage of your vulnerable situation. Be cautious of foreclosure rescue scams that promise unrealistic solutions for a fee. Always verify the legitimacy of individuals or companies offering assistance.
  • Assume Foreclosure is Inevitable: Don’t assume that losing your home is the only outcome. By seeking assistance early, exploring loss mitigation options, and understanding your rights, you can increase your chances of finding a solution that allows you to keep your home.
  • Neglect Legal Advice: While this guide provides essential information, it’s not a substitute for legal advice. Consulting with a legal professional can help you navigate the intricacies of foreclosure law in Arizona.


Facing foreclosure is undoubtedly stressful, but understanding the process can empower you to make informed decisions about your financial future. Remember, seeking legal advice and assistance is crucial during this time to protect your rights. This guide offers only a simplified overview, and individual cases may vary. By arming yourself with knowledge and exploring your options, you can navigate the foreclosure process in Arizona more confidently.