The Dangers of Having a Relative Pay Your Mortgage
Question: After I was transferred to San Diego two years ago, I let my brother stay in my home in Avondale. Instead of paying rent to me, my brother agreed to make the mortgage payments for the home. Although I knew that my brother was having trouble recently making some of the mortgage payments, my brother promised me that he would keep the mortgage current. My brother called me last week, however, to say that there had been a foreclosure of the home. I am upset with my brother because, if this foreclosure is valid, I have lost at least $40,000 of equity that I had in the home. I am also upset with the mortgage company because I never had any notice of the foreclosure. Did the mortgage company have an obligation to notify me about the foreclosure because I was the owner of the home?
Answer: Yes, but under Arizona law the only requirement for notice by the mortgage company to the owner of the home is mailing by certified or registered mail a notice of the foreclosure sale to the owner’s address on the mortgage. There is no requirement that the owner of the home receive the notice of the foreclosure sale. In your situation the notice of the foreclosure sale was probably mailed to you at the address of the home in Avondale, and was probably returned undeliverable or never opened by your brother.