How We Get People Out of Foreclosure

Foreclosure can be a very tough and stressful situation for anyone going through it. Having your home in jeopardy is the last thing we want you to deal with. Surprisingly, people in foreclosure have a variety of options they can use at their disposal to keep their home! Unfortunately, there isn't a whole lot of information out there that goes in-depth on what people can do, which causes many people to end up selling their house when they didn't have to - or even worse - getting scammed and losing their home altogether. 

That's why we made this page. Here is everything we know so that you can get out of foreclosure and keep your home as soon as possible. Let's walk through it together.

Foreclosure is a process of the lender recouping their investment by taking control of the property, or just putting it up for auction (throughout this article, we'll interchange between 'bank' and 'lender', they're the same thing). Arizona is a Trust-Deed State, which means that the instrument to secure the home loan is a 'Deed of Trust.' This is important because that entails a specific foreclosure process. 

In Arizona, a homeowner goes into foreclosure when they're delinquent on their loan payments for 90 days. After that, the bank will work with the Trustee to issue a 'Notice of Trustee Sale.' This is a document notifying the payer that they have 91 days to pay back the delinquency of the loan, or the house goes to auction. Notice how there's no judicial system involved? That's because the home was secured with a 'Deed of Trust.' Most banks will use a 'Deed of Trust' because the foreclosure process is a lot faster and cheaper for them than the traditional 'Mortgage.'

What is a Trustee? This is a 3rd party that facilitates the foreclosure process for the bank. They can be a point of contact for you, but normally it's better to reach out directly to the bank first. 

It's important to know your rights in the foreclosure process, that way you won't be taken advantage of. Remember:

- You must be notified at least 90 days before the sale date
 

- Lenders must send a Notice of Trustee Sale via certified mail
 

- Arizona has a “right to reinstate”: You can stop the foreclosure by catching up missed payments up to 5 business days before the sale
 

- Anti-deficiency laws may protect you: If it's your primary residence and on 2.5 acres or less, the lender usually can’t sue you for the unpaid balance after foreclosure
 

Bonus Tip: Check your Trustee Sale Notice date immediately — this will tell you how much time you have left.

Here's the nitty-gritty. Here are the top options we use to get people out of foreclosure. We'll preface with one important step: Contact Your Lender! 

It's imperative that you contact your lender as soon as possible. The process of getting out of foreclosure can be lengthy, and given you only have 90 days, it's important to get the ball rolling as soon as possible. Don't delay in reaching out to them. This is the absolute first step you must take.

When you reach out to them, be calm and collected. You're entering into negotiations - remember that. Most of the time the bank doesn't want to foreclose. Talk to them about your situation and explore your potential solutions. Now that we know, here's your top options, from best to not-the-best.

1. Reinstatement

If you pay the past-due amount (and late fees) in full, you get out of foreclosure and keep your home. You have up until 5 days before the auction date to pay the reinstatement bill, according to Arizona law. For many people we've worked with, they would have loved to take this option if they could - but because of financial reasons they weren't able to make the lump-sum payment. 

2. Loan Modification

Your lender may offer to modify your loan, such as lowing the interest rate or extending the loan term, making your payments more manageable. This is an excellent way to give yourself some time to get a plan moving forward in keeping your home! Disclaimer: when dealing with the lender, carefully review all documents they send, especially if it involves any sort of options. 

3. Forbearance

A forbearance allows you to temporarily pause or reduce your mortgage payments for a set period, providing you time to catch up. There are work out plans you can negotiate depending on your bank/lender. This is good for a short-term situation, like a job loss or medical event. 

4. Repayment Plan

You may be able to make up missed payments over time through a repayment plan. Just be careful of the agreement you make with the bank, there may be no second chance to re-negotiate if you miss out on payments again. 

5. Home Refinance

A refinance will replace your existing mortgage with a new one. This will allow you to get out of foreclosure while keeping your home. This may work if you have good equity in your home - otherwise you'll have to look at other options.

6. Consult a Foreclosure Relief Expert

This is a favorable option if you are uncomfortable negotiating with the bank by yourself. A Foreclosure Relief Expert, under your authorization, will go to the bank on your behalf to get you the best possible outcome. They also contact attorneys on your behalf. Make sure that the expert you are contacting is a real-estate professional; a realtor or broker. Here at FRS - we offer this at no cost to our clients. 

7. Consult with a Legal Professional

You can reach out to a specialized attorney for guidance on your situation. They may charge for their services, so be prepared before you talk to them. They've been very helpful for people across Arizona when it comes to foreclosure. 

8. Sell Your Home

Selling your home on your terms can also be a way to avoid foreclosure. Consult with a real-estate professional to maximize the sale of the home so you can get the most. Depending on the condition of the property, the real-estate professional should provide you with a BPO (Broker Price Opinion) for your home. 

9. Deed in Lieu of Foreclosure

In some cases, you may be able to deed your property to the lender in exchange for a release from the mortgage. They may offer you "cash for keys," which means a lump-sum of cash to get out of the home. This option affects your credit slightly less than a foreclosure. 

10. Short Sale

This involves selling your home for less than the outstanding loan balance, and the lender may agree to release you from the debt. It is a lengthy process and you should use a real-estate professional as it involves important documents the lender will require to consider the short sale process. 

11. Bankruptcy

This option is a last ditch effort - filing for bankruptcy can temporarily stop the foreclosure process. Contact an attorney for more specifics as it involves a good deal of legal nuance. You will take a large hit to your credit, but at least you can keep your home for a time. 

Delaying to Contact the Lender

The more time you waste not reaching out to them, the more likely your home will go to auction. Many options take weeks to be processed, and you only have 90 days!

Falling for Scams

In Arizona, we've seen a large increase in deed scams. People will try to persuade you into signing a document - especially without you reviewing it. When this document is signed, you lose your deed, which means losing your home. Next thing you know, you're forced to move out of your own house without getting a single penny! Many of them will contact you by knocking on your door, so beware whenever someone approaches your home with a 'solution'!

Always make sure the person you're dealing with is a licensed professional (broker, attorney, lawyer, etc.)

Not Documenting Everything

Keep a paper trail of all documents relating to your home and the foreclosure process. You protect yourself this way from unseen liabilities. 

Trying to DIY if it gets Complex

Sometimes when communicating with the lender, things can get tangled up and messy. If things feel overwhelming, contact a professional for help and clarification. 

Being in foreclosure can be one of the most stressful situations to befall someone. However, there are many solutions available that you can do right now! Act fast to keep your home. We wish you the best.

 💬 Need help now?
Call us at 602-609-3700 for a free strategy call. We’ll walk you through your options and help you keep your home — or exit with dignity. Speak with our in-house broker right away.

Disclaimer: All information contained here is for informational purposes only. For legal guidance, contact an attorney.