When you are no longer able to make payments on your home, your lender make take steps to take back the house as a way of recouping their loan. This is generally known as a foreclosure. There are different types of foreclosures, and each one will have a different impact on you, the homeowner. If you are facing foreclosure, contact Pak & Moring to discuss your situation, to see if we can help you through this process.
Arizona residents are often faced with difficult decisions when it comes to their homes in this struggling economy. These decisions often involve their mortgages, and whether to foreclose or short sale their property. To offer a sense of direction and provide information of about the most common dilemmas, Pak & Moring is launching a series of articles dedicated to educating the public on these topics beginning with the Arizona foreclosure process.Below is a look into the non-judicial foreclosure process.
Non-Judicial Foreclosures in Arizona
The most likely and common way that a lender will seek to reclaim assets when a homeowner falls behind on the mortgage payments is though a non-judicial foreclosure. In this instance, a court case will not be filed and financial matters will be dealt with by selling your property. This occurs because many mortgages have a “power of sale” clause in their loan agreements, which results in lenders retaining the title to your property until the entirety of the mortgage amount is repaid. The document Arizona homeowners sign at the inception of their loan, known as the trust deed (or deed of trust), gives a lender the right to sell your property to pay off the balance on your loan if you stop making payments. In mortgages where this power of sale exists, the lender is typically referred to as the trustee. As the trustee, your lender and has the power to put the property up for sale through contractual authority and without judicial measures.
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