FORECLOSURES & FORFEITURES

1. Refinancing
2. Selling the home with reduced payments until sale
3. Reduced repayment plans
4. Modification of mortgage
5. Short-sale (where the bank accepts sale for less than the amount of the loan)
6. Deed in lieu, i.e., banks get deed in lieu of doing a foreclosure
7. Bankruptcy by the homeowner

Arizona law always provides for mortgages, and since 1971 Arizona law also provides for deeds of trust.  Most mortgage lenders, however, prefer deeds of trust for several reasons.

• A mortgage can only be foreclosed judicially by court proceedings, i.e., court -ordered foreclosure sale, while a deed of trust can be foreclosed either by a judicial foreclosure sale, or, most frequently, by a trustee’s sale (typically at the courthouse steps or at a title company office). Mortgage lenders save significant time and expense by a trustee’s sale.
• After a foreclosure by trustee’s sale the buyer can sell the property immediately. After a judicial foreclosure, however, the borrower has the right of redemption, i.e., the right to buy the property back from the buyer, usually within six months.

After the foreclosure of a home a 2009 federal law generally allows the tenant to stay in the home until the term of the lease expires.  The tenant, however, is not required to stay in the home after foreclosure.

Yes.  A.R.S. §33-1807 provides that an HOA may foreclose on a lien in the same manner as a foreclosure of a mortgage if the homeowner has not paid the dues for one year or owes more than $1,200.00.

No.  A lender is generally only authorized to garnish a debtor’s wages or bank accounts after getting a judgment.  In other words, the HELOC lender must first sue the homeowner for breach of contract and be awarded a judgment before they can take action to collect on the debt.