Foreclosure Is a Process, Not One Single Event. There are many steps in the process from the time you fall behind up until the sale of the house. Where you are in the process determines what options you have. It's like treating an illness: the earlier you catch it, the better your chances are at recovery. Arizona Is a Non-Judicial Foreclosure State. "Show me the Note" and "Robo-signing" defenses are not much help in Arizona. Unlike in many states, in Arizona the lender does not need to sue you or take you to court to be able to foreclose. The lender can usually sell the home at auction (also called a Trustee's Sale) after giving you notice. For Every Problem, There's a Scam Promising a Quick Fix. Foreclosure rescue scams and home loan modification scams are popping up all over Arizona. They may ask for thousands of dollars and promise they can obtain a modification from the bank or promise they can stop a sale. Be careful not to fall victim to them! You Only Get Notice the First Time a Sale is Scheduled. You may have seen a "Notice of Trustee's Sale" in the mail, on your door, or on the gate to your house. Once you see that notice, you may never see another one. That means even if the lender postpones the sale because they're working with you, they never have to tell you about a new sale date and often never will. Lenders/Servicers Often Still Foreclose, Even if They're "Negotiating" With You. You may be trying to work out a loan modification or some other plan with the lender. The person on the phone may tell you not to worry about the upcoming sale. That person may even tell you there is no sale. The reality is most lenders can and do still move forward with the foreclosure process even while you're trying to stop it. In Arizona, Stopping a Sale Is Easier Than Undoing a Sale. Once the sale has happened, it is extremely difficult to undo. The law is not on the side of consumers, which is why it's incredibly important to get help before the sale date. Before the sale date, there are often ways to postpone the sale while your claims are investigated. Once the sale has happened, consumers lose most of the grounds to challenge the sale. Not All Loan Modifications Are Created Equal. You may be trying to get a modification to reduce your monthly payments under the HAMP (Home Affordable Modification Program). Most lenders, however, also have in-house or private modification programs. Be sure to know which type your lender is offering you because the terms can be very different. 8. You DO NOT Need to Be Behind on Your Loan to Get a Loan Modification. No matter what anyone tells you, including the lender and its representatives who answer the phone, you DO NOT need to be behind on your loan to get a modification. Most of the government modification programs have a requirement you be in default OR at high risk of default. You do need to be able to show hardship, but most people are able to do that through showing income loss and/or increased bills. 9. Some Loan Modifications Can Make Your Payments Higher. 9. Some Loan Modifications Can Make Your Payments Higher
If you do get a permanent modification under a private program, the payments under the permanent rate may be just as high as your original monthly payments. In some cases, they're even higher. The explanation for this is usually written in tiny print on one of the many pages you're asked to sign.
The reason the payments can be higher than your trial plan payments is because the permanent modification usually adds in amounts the trial plan didn't have such as:
o Some or all of your missed payments
o Any and all late fees
o The difference between your regular payments and the trial modification payments
The missed payments and fees are added on to the total amount you owe, divided by the number of months left on your loan, and then added to your monthly payment. 10. Lenders Are Not Required to Give You A Modification, Even if You Qualify. Most of the time, lenders are not required to permanently change the terms of your loan through a modification. Even if you "qualify" for a trial or temporary modification and make all the payments on time, the lender does not have to make it permanent. If they promised to make it permanent and then failed to do so, you may be able to hold them accountable for that.