What are the foreclosure laws in Arizona?

The laws for foreclosure in Arizona can be confusing.

Summary:

Judicial foreclosure in Arizona is rarely used, and only in the absence of a power of sale clause in the loan document or when the lender is seeking a court order for a deficiency judgment. The lender must sue the borrower to obtain a decree of foreclosure and order of sale.

Non-judicial foreclosure requires the lender's trustee to record a notice of sale in the county in which the property is located. And within five days of recordation, mail by certified mail a copy of the notice to all parties to the deed of trust. The notice must also be published weekly in a newspaper of general circulation in the county for four consecutive weeks, the last publication not less than ten days prior to the date of sale.

The notice shall also be posted, at least twenty days prior to the sale at the property to be sold, without a breach of the peace, and at the county courthouse.

The sale shall be conducted by the trustee for cash to the highest bidder. The successful bidder must make payment to the trustee's satisfaction by 5:00 PM on the day following the sale unless that day is a Saturday or a legal holiday. If the high bidder fails to make payment, the sale may be continued, or postponed to another time or place by public declaration, or the trustee, at his discretion may immediately offer the property to the second highest bidder. The successful bidder receives a trustee's deed on completion of the sale. The sale is deemed complete upon payment of the amount bid. The lender usually bids in the amount of the balance due plus costs. If no one else bids, the property reverts to the lender.

Deficiency judgments are not allowed if the foreclosed property consisted of 2.5 acres or less, and was a single family or two family dwelling.  Deficiency judgments may be sought on other types of property and suit must be filed within 90 days of the date of sale.