If a homeowner should happen to become delinquent on their mortgage payment for 3 consecutive months, a Notice of Trustee Sale or Notice of Default is issued by their mortgage company. It is at this point in time when the property enters “pre – foreclosure.”
The property will keep said classification until one of a few different things happen, after the home or property has been termed as a “pre-foreclosure.” The owner may bring the mortgage payments up to date, they may get approved to modify their loan with their lender, the home may be sold in a “short sale, ” which is selling the home for less than what the owner owes, or the home may be sold by the bank through a Trustee Sale Auction.
A pre-foreclosure in essence does not covert to an actual foreclosure until the property is sold at auction through a Trustee Sale. This kind of home sale is only legal in 13 states, one of which is Arizona. This Trustee Sale is also known as a non-judicial procedure. The other type of foreclosure is called a judicial foreclosure. This article will only focus on the non-judicial foreclosure.
As we said previously, the pre-foreclosure is affected by a Notice of Trustee Sale. The Notice of Trustee Sale serves as public notice of the mortgagor’s intention to take possession of the home from the homeowners or to market the home through an auction. If there are other entities that possess some sort of interest in the property, such as contractors, homeowners associations, other mortgagors or county assessors, they too have the right under law to foreclose on the home too.
When the owner has been notified of the Notice of Trustee Sale, they are considered in “pre – foreclosure,” status. For Tucson foreclosures, the home cannot be sold or auctioned until a minimum of 90 days have passed since the Notice of Default is issued. This permits the homeowner a window of opportunity to renegotiate their mortgage and modify their loan, become current on their missed mortgage payments, or negotiate a short sale and stop any further foreclosure action.
Any homeowner facing a pre-foreclosure or foreclosure scenario should consult with an attorney to identify all legal ramifications and consequences. A bankruptcy filing can sometimes postpone a Trustee Sale but again legal advice is highly recommended.
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