Arizona uses two different Foreclosure Processes. Judicial and Non-Judicial.

Most mortgage lenders in AZ will use the Non-Judicial Foreclosure process so that’s what we’ll talk about.

If you are facing foreclosure it’s a good idea to talk to a financial advisor, Lawyer and a Real Estate agent.


Pre-Foreclosure is the time between when you first miss a payment and the bank initiates the foreclosure process.

The bank will send you a notice of default which is a letter that lets you know you are behind on your mortgage.

Due to federal regulations this is generally at least 120 days but can vary depending on the situation.

Because of this it’s a good idea to at least consult an attorney to make sure you’re getting the right amount of time to bring the loan current.

This time period is also a good time to financial advisor, because they can help you work on your finances to help you get current.

During this period of time the bank will reach out to you and generally they will want to work out a way to get your loan current.

The bank can offer you a variety of solutions like a payment plan, forbearance or loan restructuring.

The different options they offer depend on what the bank is currently offering as well as the terms originally set out in your loan agreement.


Once the bank has tried to recover the money you owe unsuccessfully they will file for foreclosure.

This involves the bank getting the trustee involved.

The trustee is an attorney who the bank designates to do the foreclosure.

The trustee will record the foreclosure and send you a notice in the mail as well as post a notice on the property and put an announcement in the newspaper.

Once the Foreclosure process starts in AZ you have 90 days to bring the loan current or pay it off.

If you are unable to payoff or bring the loan current then on the 91st day the trustee can do a trustee sale.

This is an auction type of sale where the general public is allowed to come and bid on the property.

The bank does this because they need their money back, but if the bank is unable to sell the property the trustee transfers the property to the bank.

If the bank sells the home for less than the amount owed the bank can get a judgement against you.

If this happens to you it’s a good idea once again to talk to an attorney.

Who can be foreclosed on

Banks can foreclose on any property where the property owner fails to make the payments

The owner’s equity position in the property doesn’t matter.

You could pay on a house for 30 years and if you miss the last payment they can foreclose on you.

The problem Homeowners face

The problem homeowners face in foreclosure is losing any equity they have in the property.

Many people treat their home as a sort of savings plan. They pay the mortgage and gain equity with the intention of selling at a profit later on in life.

If you are foreclosed on this savings in equity can all be lost.

If you have been paying on your home planning on using the equity later on this can be devastating.

The other problem homeowners face is the credit impact. A foreclosure can stop you from buying a house for quite some time.

This means you will go from being a homeowner to a renter that appears risky to landlords, so you’ll often pay more in rent, need a bigger deposit or just be disqualified.

So what do you do?

The question I get asked the most about foreclosure is how to prevent it.

The easiest answer is to pay the loan, but this is generally the problem in the first place.

This is where I first recommend you talk to a financial advisor.

A good financial advisor can look at your income and spending and help you come up with a plan.

They could also look at your situation and tell you to sell certain assets including the house to pay off the debt.

If a bank isn’t giving you payment options, it’s a good idea to take you loan documents to an attorney to review because they might find something.

The Point of No Return

Most people I’ve talked to who have gone through foreclosure they have a moment where they realize they just can’t pay the loan.

They often call it the point of no return, because they feel helpless.

This is the point here you can decide to bury your head in the sand or take action.

The sooner you come to the realization the better.

If you are currently in pre-foreclosure or even earlier and you realize that you can’t make the payment this is the best time to decide to sell the property.

Remember the bank doesn’t want your house they money the money loaned you for it.

If you have equity you can sell the house payoff the mortgage and take the equity and save your credit.

You could even go buy a different house that you can afford comfortably.

The Problem

The problem is when people wait too long to sell.

The longer you wait the less money you will make from the sale of the property.

The reason for this is because the less time you have to sell the lower you’ll have to price the home to entice buyers to buy it quickly.

The other issue is information is easily accessible.

Foreclosures are a matter of public record. This means buyers will know you are in foreclosure.

This tends to encourage buyers to offer less because they know you have to sell.

Sometimes people can even look up lists of people in pre-foreclosure.

Because this information is easily accessible, you’re probably going to get a lot of phone calls from real estate agents and investors trying to buy or list your house.

There are solutions to help you sell your home and keep your equity no matter what stage you’re at in the foreclosure process.

I work with homeowners and help them sell their homes to avoid foreclosure and keep their equity.

If you are in foreclosure or about to go into foreclosure reach out and I’d happy to discuss your situation with you and help you save your equity.