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Arizona Foreclosure Law Summary
WHAT IS A SHORT SALE
WHY USE SHORT SALE US
Quick Facts
SUCCESS STORIES - Judicial Foreclosure Available: Yes
WHO QUALIFIES FOR A SHORT SALE - Non-Judicial Foreclosure Available: Yes
FAQs - Primary Security Instruments: Deed of Trust, Mortgage
SHORT SALE NEWS - Timeline: Typically 90 days
VALUE YOUR HOME - Right of Redemption: None
STATE FORCLOSURE LAWS - Deficiency Judgments Allowed: Varies
CONTACT US In Arizona, lenders may foreclose on deeds of trusts or mortgages in default
using either a judicial or non-judicial foreclosure process.
HIRE US
Judicial Foreclosure
The judicial process of foreclosure, which involves filing a lawsuit to obtain a
court order to foreclose, is used when no power of sale is present in the
mortgage or deed of trust. Generally, after the court declares a foreclosure,
your home will be auctioned off to the highest bidder.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when a power of sale clause
exists in a mortgage or deed of trust. A "power of sale" clause is the clause in
a deed of trust or mortgage, in which the borrower pre-authorizes the sale of
property to pay off the balance on a loan in the event of the their default. In
deeds of trust or mortgages where a power of sale exists, the power given to
the lender to sell the property may be executed by the lender or their
representative, typically referred to as the trustee. Regulations for this type of
foreclosure process are outlined below in the "Power of Sale Foreclosure
Guidelines".
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of sale clause and specifies
the time, place and terms of sale, then the specified procedure must be
followed. Otherwise, the non-judicial power of sale foreclosure is carried out
as follows:
The trustee must record a notice of sale in the office of the recorder of the
county where the property is located. Within five (5) days after the notice is
recorded, the trustee must mail, by certified mail, a copy of the notice of sale
to each of the people who are parties to the trust deed, except for himself.
Additionally, the notice must appear in a newspaper in the county where the

property is located once a week for four (4) consecutive weeks, with the last
notice being published not less than ten (10) days prior to the date of the sale.
Optionally, if it can be done without a breach of the peace, the trustee can
post the notice at least twenty (20) days prior to the date of the sale, in some
conspicuous place on the property to be sold and/or he or she can post the
notice at the courthouse or at a specified place at the place of business of the
trustee in the county in which the property is located.
The trustee or the trustee’s agent must conduct the sale. The sale is for cash
to the highest bidder, except that the lender can make a "credit bid," which
means to cancel out some part (or all) of the money the borrower owed the
lender on the lean, instead of paying cash. A successful high bidder must pay
the bid price by 5 pm of the day after the bid, other than a Saturday or legal
holiday. Every bid is an irrevocable offer until the sale is completed, which
happens when the bidder pays the bid price to the trustee’s satisfaction. If the
high bidder fails to make the payment by 5:00 pm, the day after being notified
of the option to buy, then the trustee may postpone the sale.
The trustee may postpone the sale to another time, or another place, by giving
notice of the new date, time and place by public declaration at the last place
and time the property was offered for sale. No other notice is required. A
trustee may also, by written agreement, extend the time for a buyer to come
up with the payment.
Once the sale is complete, the proceeds will go to the payment of the
obligations secured by the deed of trust that was foreclosed, then to junior lien
holders in order of their priority. The successful bidder gets a trustee’s deed,
which provides conclusive evidence that the trustee conducted the foreclosure
sale property.
A note regarding Deficiency Suits: A lender may not bring a deficiency suit
against a person who lost a property that is 2.5 acres or less at a foreclosure,
provided the property was a single one-family or a single two-family dwelling.
This is so even if the high bid at foreclosure was less that the balance due on
the loan. However, in foreclosures against other types of property, a deficiency
suit is allowed, but is limited to the difference between the balance owed and
the fair market value of the property, and then only if the suit is brought within
ninety (90) days of the power of sale foreclosure.
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