In the state of Arizona, one in every 106 housing units had a foreclosure filing in the first quarter of 2012. This was the nation's third highest state foreclosure rate. If you are not at risk for this devastating event, someone you know is. Whether you have to live through the problem yourself or help someone you love get through it, here are the basic steps every foreclosure has to go through to get to the point where the locks are being changed and there are only a few days left to move out and find a new place to call home.
- First month's missed payment: The lender will make contact by letter or phone. A housing counselor can help at this point and can provide the options that are available. It is possible to find a non-judgemental housing counselor through the federal government at HUD.
- Second month's missed payment: The lender is likely to begin calling to discuss why payments have been missed. Although it may seem easier to avoid them, and it is certainly less humiliating to ignore them, it is important to take their phone calls no matter how hard it might be. Talk to the lender, take the time to explain the situation and go through what you are trying to do to resolve it. At this time, it still may be possible to make one payment to prevent from falling three months behind.
- Third month's missed payment: After the third payment is missed, a letter from the lender is sent stating the amount delinquent, and that there are 30 days to bring the mortgage current. This is called a "Notice to Accelerate." If the specified amount is not paid or arrangements are not made by the given date, the lender may begin foreclosure proceedings. They are unlikely to accept less than the total due without arrangements being made if the loan is this delinquent. It’s important to realize that it is still possible to work something out with the lender. A housing counselor can still help.
- Fourth month's missed payment: The end of time allowed in the Notice to Accelerate Letter is nearing. When the 30 days ends, if the full amount is not paid or you haven’t worked out arrangements you will be referred to your lender's attorneys. You will incur all attorney fees as part of your delinquency. A housing counselor can still help you.
- Sheriff's or Public Trustee's Sale: At this point it is in the attorney’s (also known as the trustee’s) hands, and they will schedule a sale. This is the actual day of foreclosure. In the state of Arizona, the requirements are as such: Within five (5) days after the notice of foreclosure is recorded, the trustee must mail, by certified mail, a copy of the notice of sale to each of the people who are parties to the trust deed of the home, except for himself. Additionally, the notice must appear in a newspaper in the county where the property is located once a week for four (4) consecutive weeks, with the last notice being published not less than ten (10) days prior to the date of the sale. This next part are the details to watch out for: Optionally, if it can be done without a breach of the peace, the trustee can post the notice at least twenty (20) days prior to the date of the sale, in some conspicuous place on the property to be sold and/or he or she can post the notice at the courthouse or at a specified place at the place of business of the trustee in the county in which the property is located. This means the notice of foreclosure and intent to sell may not be posted on your property. Be sure you are in contact with your lender, even if you have gotten past all hope of getting upright on your loan again. This relationship will be the foundation for getting the information you need about what is happening to your home. Even though the foreclosure process has been started at this point, you have until the date of sale to make arrangements with your lender, or pay the total amount owed, including attorney fees.
- Redemption Period: If your home is auctioned to another buyer, you may enter a redemption period. You will be notified of your time frame on the same notice that your state uses for your Sheriff's or Public Trustee's Sale.
According to the Department of Housing and Urban Development, these are the basic steps that every foreclosure must to go through in Arizona. The key to making this awful process go as smoothly as possible is to be in contact with your lender, no matter how embarrassed or angry you are or the person you’re helping may be. Only then will you have enough information to make the best decision possible. Another option for advice is to contact the actual person who helped you obtain your mortgage with your mortgage company. You entered into this mortgage with them in the first place, and you have a relationship with them that can be used for some honest advice. They may have perspective or advice that you’re not getting from the foreclosure arm of the customer service part of their company. It’s worth a phone call to contact them and pick their brain on what you should do. The more information you have, the better a decision you can make when it comes time to act.