The Trusted Home Buyer Logo602-456-4440

How Does the Foreclosure Process Work?

a person smiling for the camera

Martin Boonzaayer

January 25, 2023

Unfortunately, foreclosures are a regular occurrence, and many Arizona homeowners face the possible foreclosure of their homes. This article will walk you through the foreclosure process and offer some options or steps you can take to avoid foreclosure.

What Is Foreclosure?

Foreclosure is the legal process of a lender who attempts to recover the amount owed on a defaulted loan by taking ownership of the mortgaged property with the intent to sell it. When a borrower fails to meet the terms they agreed to in their mortgage document by missing monthly payments, a lender is entitled to take back the home. 

What Is the Foreclosure Process?

The foreclosure process can start legally once you are 120 days past due on your mortgage payments (although there are some exceptions). Once you are 120 days late on payments, a lender can file a lawsuit asking the court to allow a foreclosure sale. You will receive a written letter and will be asked to respond. However, if you do not respond by the allotted time, the lender will automatically win the case.

You can choose to defend the foreclosure lawsuit, and the court will review your case to evaluate the evidence and determine who wins the case. If your lender wins the case, they will enter a judgment against you and order your home to be auctioned. 

Once the sale hits the public auction, the lender might make a credit bid. This means the lender can bid up to the amount owed on the home, or they may bid a lesser amount. In Arizona, if the lender is the high bidder but bids less than the total debt, they can get a deficiency judgment against the borrower. However, if a third party is the highest bidder and offers more than your amount owed, the sale results in excess proceeds, and you are entitled to that money.

How Can You Avoid Foreclosure in Arizona?

How Does the Foreclosure Process Work?

While a foreclosure can be a scary prospect, there are some options and ways to avoid foreclosure on your home.

Don’t Avoid the Problem

The further behind you become, the harder it is to avoid foreclosure. Stay on top of your mortgage payment information, and don't ignore the problem. 

Contact Your Lender

Stay in contact with your lender, open any mail, and answer all phone calls. Sometimes your lender will work with you or have program options to help you get caught up on your mortgage. 

Know Your Mortgage Rights

Find your loan documents and read them thoroughly to know what your lender has legal rights to do if you can't make your payments. The laws and timelines for foreclosure vary by state, so contact your local State Government Housing Office.

Work on Your Finances

You could sell jewelry, an extra car, or use a life insurance policy to get caught back up. This is also an excellent time to check on your spending habits. Are there any cuts you can make to your budget to catch up on payments?

Find a Mortgage Takeover Program

A mortgage program can help you avoid foreclosure. At The Trusted Home Buyer, we can buy your house "subject to" the existing mortgage and take it over. This program will allow us to make on-time payments or get your mortgage paid up-to-date. However, the note will remain in your name. This program can rebuild your credit, help you avoid foreclosure, and give you a higher price and more equity from your home.

Explore more

December 21, 2023
Should You Sell Your Home During The Holidays? 

The holiday season is often associated with warmth, joy, and celebrations. While many homeowners might be hesitant to put their homes on the market during this festive time, selling your home during the holidays can actually be a strategic move. In this blog post, we'll explore the benefits of selling your home during the holidays […]

Read More
December 8, 2023
Pros and Cons Of Selling Your House 

Selling your house is a significant decision that comes with both excitement and challenges. Whether you're looking to upgrade, downsize, or relocate, understanding the pros and cons of selling your house is crucial for making informed decisions. In this blog post, we'll explore the various aspects of selling your home to help you navigate the […]

Read More
December 8, 2023
10 Must-Have Upgrades For Your Home in 2023

If you ever wanted to upgrade your home in a smart way, then 2023 is going to be the year for you! With the latest technologies and designs, there are so many ways you can update your living space. From smart appliances that make life easier to energy-efficient lighting fixtures that save money, these must-have […]

Read More
November 10, 2023
10 Ways To Sell Your House in AZ

Selling your house in Arizona can be a challenging task, given the competitive real estate market and diverse buyer preferences. To ensure a swift and profitable sale, it's crucial to adopt effective strategies tailored to the unique characteristics of the Arizona market. In this blog post, we'll explore ten proven ways to sell your house […]

Read More
The Trusted Home Buyer Logo
Copyright © The Trusted Home Buyer
WE BUY HOUSES IN:

4.7 68 reviews