It is unfortunate that when economic activity declines and housing sales activity also declines, more real estate enters the foreclosure process. High rates of interest and creative financing arrangements also tend to be contributing factors. Sedona was not immune to the recent economic crisis. The Sedona real estate market was believed by many to be immune due to the high demand for homes. People fall in love with Sedona and move here all the time.
Anytime the Sedona real estate prices are rapidly accelerating during a real estate “bonanza”, many individuals go to any lengths available to get into the market in Sedona by means of investments in holiday homes, rental homes and “trading up” to more costly properties. In some instances, this results in the taking on of high rates of interest payments and second, third and even fourth deeds of trust. Many of the Sedona AZ consumers anticipate that interest rates will fall and home prices will carry on and escalate. Neither of the two might occur, and borrowers may be faced with big “balloon” payments becoming due. Whenever repayments can not be met, the property foreclosures process looms on the horizon.
In the property foreclosures process, one thing needs to be kept in mind as a general rule, a lender would rather receive payments than receive a home due to a foreclosure. Loan companies are not in the business of selling real estate and may often attempt to accommodate homeowners who are having repayment difficulties. The most effective plan is to contact the financial institution before repayment difficulties arise. If monthly obligations are too hefty, it could be that a loan company will be able to make some alternative repayment arrangements until the owner’s particular predicament improves.
Suppose, however, that a Sedona home owner has skipped payments and has not made any kind of alternate measures with the loan provider. In cases like this, the financial institution might decide to start the foreclosure process. Under these kinds of circumstances, the lender, whether a bank, savings and loan or private party, will request that the trustee, usually a title company, file a notice of default with the county recorder’s office. A copy of the notice is mailed to the property owner.
When the default is because of a balloon payment not being made when due, the financial institution may demand full repayment on the entire outstanding mortgage loan as the only method to cure the default. If the default isn’t remedied, the financial institution may direct the trustee to sell the property at a public sale.
In cases of a public sale, a notice of sale must be published in a local newspaper (typically the Sedona Red Rock News) and posted in a public location, commonly the courthouse, (Yavapai County or Coconino County) for four sequential weeks. When the notice of sale has been recorded, the property owner has until 90 days from the filing of the Notice of Salee to bring the loan current. This is called the reinstatement period. If the owner remedies the default by making up the payments, the deed of trust will be reinstated and regular monthly installments will carry on as before.
Following this time, it might still be possible for the home owner to work out a postponement on the sale with the lender. However, if no postponement is reached, the property goes “on the block”. At the sale, buyers need to pay the amount of their bid in cash, cashier’s check or other instrument acceptable to the trustee. A lender may “credit bid” as much as the amount of the obligation currently being foreclosed upon.
With the recent interest given to property foreclosures, there also has been related interest in obtaining foreclosed homes. However, caveat emptor: buyer beware. Foreclosed homes are very apt to be burdened with overdue taxes, liens and clouded titles. A buyer should do his homework and ask a local title company for details concerning these types of outstanding liens and encumbrances. Title insurance might or may not be available following a foreclosure sale and various conditions may be included in any title insurance policy issued to a buyer of a foreclosed property. The successful bidder might have to carry out the eviction of the borrower if they have not left the home.
Your local title company will gladly provide additional information.
Troy & Susan Deierling – Realtors
Russ Lyon Sotheby’s Intl. Realty