Foreclosure

questions & answers

Question: Is it legal for my lender to switch lenders and foreclose my house and sell at auction with out giving me any notification or giving me the option to file bankruptcy

Answer: Typically, mortgage lenders are short-term financers, meaning they do not have the funds to service the account through the life of the loan (for example 30 years). The mortgage lenders will sell the loan to another lender who can fund the loan long term. So, as far as your question about "switching lenders," that happens in most cases.

Now, to the foreclosure sale. Arizona is a non-judicial foreclosure state, which means the courts do not have to get involved. Your mortgage more than likely had a "power of sale" clause in the contract. That means the lender can initiate the foreclosure after a default in payments (not making payments).

Usually, the lender will not start foreclosure proceeding until after several months of missed payments (although technically they could start from day 1 of missed payment).

If the lender decides to go forward with the foreclosure, there are a couple things that need to be done (this should help answer the notification part of your question).

The lender will record with the county recorders office what is called a Notice of Trustee sale (NOS). This is sort of a final warning that a foreclosure is coming. There are some steps they need to follow; 1. the lender needs to advertise the NOS once a week, four consecutive weeks in a local newspaper, 2. a copy of the NOS needs to be posted at either the property, the courthouse, or the trustee's (lender's) business; 3. within 5 days after recording the NOS, the lender needs to send a certified letter to the property address.

Information in the NOS is as follows; when the foreclosure sale will take place, where the foreclosure sale will take place.

Finally, you have up until the sale of the property at auction to bring your account current with the lender. Once, the foreclosure sale is finalized this "redemption period" ends.

I would highly recommend you speak with an attorney who is familiar with foreclosures and let them review your situation.

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