If you are threatened with foreclosure, you must understand your legal rights. Foreclosure is the enforcement of a lien, mortgage, or deed of trust by a lender or their agent, when the borrower defaults on a loan secured by a piece of property.

In Arizona, there are two methods of foreclosure. The first is called a Judicial Foreclosure. This method is initiated by the lender filing a lawsuit against the defaulting borrower. Once the lender obtains a judgment against the borrower for the amount of default, plus costs and fees, the property is then sold through a public auction. Mortgages must be foreclosed through Judicial Foreclosure.

More common in Arizona is a Power of Sale. The lending institution has borrower sign a Promissory Note secured by a Deed of Trust, which provides the trustee with the Power of Sale. The trustee initiates the foreclosure by filing a Notice of Sale. The Power of Sale bypasses the lawsuit process and allows the trustee to sell the property at a public auction.

Both methods of foreclosure are subject to the rules and procedures set forth in Arizona laws. Anyone involved in foreclosure proceedings must be aware of the foreclosure process and law.

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