1. Borrower breaches contract by missing payments and thus going into default. Each agreement specifies the number of months late required for borrower to be in default.
2. Lender may send Notice of Demand to warn borrower of imminent foreclosure.
3. If borrower does not bring payments current, lender initiates foreclosure proceedings.
4. Lender instructs Trustee to record and publish a Notice of Trustee’s Sale (NOS). At this point in time, the trustee may substitute another trustee to take care of the foreclosure process.
5. Trustee then posts Notice of Trustee’s Sale on property. The Notice of Trustee’s Sale will stipulate the time and location of the trustee’s sale. The Trustee’s Sale cannot lawfully occur until the 91st day after the NOS was recorded.
6. The trustee’s sale is held either at a courthouse or at an office. If the trustee is located outside the state of Arizona, then the sale is held outside of the county courthouse of the county where the property is located. If the trustee is local, then the sale is held at the trustee’s office.
7. The trustee’s sale may be postponed. Number of postponements permitted depends on the loan servicer.
8. The day before the date of the trustee sale, an opening bid on the property is set. The opening bid may be an amount that includes the principal, interest, late charges, and attorney’s fees. Note that the opening bid may be an amount that is less than that amount in some instances.
9. If someone makes a successful bid that day and then pays for the property, then the property will transfer ownership to that person.
10) Often there is no successful bidder and the property goes back to the beneficiary, the bank. This is recorded as a sale on the county tax records.
11) After a few weeks or months, the bank offers the property for sale on the real estate market through the use of a listing agent.
Attorney at Law
The Chubaty Law Firm, PLLC