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Arizona Foreclosure Law
Both court and out-of-court foreclosures occur in Arizona.
The typical timeline for an out-of-court foreclosure is about
four months.
Pre-foreclosure Period
Court foreclosures begin when the lender files for
foreclosure in court and records a notice of the pending lawsuit
(Lis Pendens). The court filing includes the debt and default
amount. The borrower and any junior lien holders are notified
either in person or by publication. If the borrower does not
respond to the court action, the court can rule against them and
set the amount owed to the lender. The county clerk then directs
the county sheriff to conduct a sale of the property to recover
the amount owed. An out-of-court foreclosure sale may occur if a
clause in the trust deed permits the lender to sell the property
if a borrower defaults. To start the foreclosure, the trustee
records a notice of sale, and the sale occurs at least three
months after the notice is recorded. Until 5:00 p.m. the day
before the sale, the borrower or any junior lien holders may
stop the foreclosure by paying the default amount, fees, and
costs.
Notice of Sale / Auction
For court foreclosures, the sheriff conducts the sheriff's
sale about 45 days after the county clerk directs the sale. It
is a public auction, and anyone may bid. The bid price must be
paid to the sheriff by 5:00 p.m. the day after the sheriff's
sale. After the sale, a certificate of sale is issued. If the
property is not abandoned, the redemption period is six months
from the sale date. If the borrower does not redeem, any
secondary lenders may do so within a specified time. To redeem
the property, the total amount owed plus fees and costs must be
paid. If no one redeems the property, the sheriff transfers
ownership to the winning bidder. For out-of-court trustee sales,
the notice of sale contains a property description, and the
date, time and place of the sale. The notice is recorded, and
the trustee mails the notice to all affected parties at least
three months before the sale date. The notice appears in a local
newspaper once a week for four weeks, with the last notice
published no less than 10 days before the sale date. At least 20
days before the sale, the notice is posted on the property and
the county courthouse. Starting the day before the sale and up
to the sale, the trustee must provide the opening bid of the
sale to anyone who asks or the sale may have to be postponed.
The trustee or the trustee's agent conducts the sale at the
property, the courthouse, or the trustee's office.All bidders
must provide a refundable $1,000 deposit in order to bid; the
trustee keeps the deposit of the winning bidder. The sale can be
postponed up to 90 days by announcement at the originally
scheduled sale. The winning bidder has until 5:00 p.m. the next
day to pay the full bid price, after which the trustee transfer
ownership of the property within seven days. The proceeds of the
sale are paid to the primary lender, then to any secondary
lenders. There is no right of redemption for the borrower after
an out-of-court foreclosure sale.
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