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Foreclosure Counseling is dedicated to assisting
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biggest mistake a person can make when facing
foreclosure is giving up and abandoning the house.
Often times there are many options and
alternatives that he or she is eligible for.
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In
Arizona, foreclosure can be a swift and simple procedure
by a mortgage company. Foreclosure is the legal process
by which a mortgage company can obtain legal ownership
of a property. It relinquishes a home owner from any all
right to the property and evicts the homeowner from the
premises.
In most cases, foreclosure can
begin a soon as a home owner is late with the mortgage
payment. If the payment is due on or before the first of
the month, for example, the lender has every legal right
to initiate foreclosure proceedings against the home
owner.
However, most
institutional lenders will try to work out alternatives
with a home owner in default before trying to repossess
a home. If a home owner works with his or her lender,
the lender will an additional three month window on
average before foreclosure is initiated. For more
information on pre-foreclosure workouts with a lender,
CLICK HERE.
If an
alternative cannot be worked out between the lender and
the home owner, the lender may begin foreclosure
proceedings. Because most home owners have a trust deed,
the foreclosure timeline is simple and quick because it
does not have to go to court to foreclose upon a home.
In
Arizona, a lender must appoint its trustee, the person
or entity that has the legal right to sell the home in a
trustee sale, to handle the appropriate paperwork. |
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By law, the trustee must record in the county
recorder's office a "Notice of Trustee's Sale". This is the legal notice
that the home is to be sold no sooner than 90 days from
the recording date of the notice. This notice must also
be published a minimum of once a week for four
consecutive weeks in a "newspaper of general
circulation" in that county. The trustee will mail a
notice within five days of the recorded notice of
trustee sale to the home owner and other parties
affected by the foreclosure.
Assuming that
the home owner has not reinstated the loan, the trustee
will conduct the sale at a previously disclosed
location. Every bidder is required to provide a $1,000
deposit to bid on the home. At such time, the home is
sold to the highest bidder, which may include the
mortgage company. If the bidder successfully wins, he or
she has until 5:00 p.m. of the following day (assuming
that it is not Saturday or a legal holiday) to pay the
remaining balance in cash or other acceptable forms of
payment as determined by the trustee. In addition to the
forfeit of deposit, a highest bidder who fails to pay
the amount bid by that bidder is liable to any person
who suffers loss or expenses as a result, including
attorney fees.
Should the
bidder fail to pay by 5:00 p.m. of the following day,
his or her $1,000 deposit is forfeited and the second
highest bidder is given until 5:00 p.m. of the next day.
Proceeds from the sale are used to pay off the primary
lien (trust deed) against the home (as noted on the
trust deed). If any proceeds remain, payment is made to
junior lien holders in order of priority. In the event
that any remaining balance is left over from the sale,
the trustee will remit the balance to the ex-home owner.
Title is conveyed to the winning
bidder by a trustee's deed. This transfer of title
relinquishes any right the previous owner has from
reinstating the mortgage or redeeming the property after
foreclosure. In addition, the trustee's deed clears the
title of any liens and encumbrances that are junior to
the trust deed.
In certain situations, junior lien
holders may pursue a deficiency judgment against the
previous owner to recover the balances owed. However, an
Arizona home owner may be protected by such lawsuits
under the law. For more information on anti-deficiency
statutes,
CLICK HERE.
Very few options exist under the
law that prevent or impede a foreclosure. For more
information on preventing foreclosure,
CLICK HERE.
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foreclosure related articles
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