Homeowner Responsible for Fees, Insurance and Maintenance Until Foreclosure Sale After Mortgage Default

Question: We were unable to make the payments on our Gilbert home. Because of the mortgage default a foreclosure sale was scheduled for May 7. We moved out of the home before the May 7 foreclosure sale, however, we recently learned that the May 7 foreclosure sale had been postponed and no new foreclosure sale date has been set. I contacted the Arizona real estate law firm that was handling the foreclosure sale, and this law firm could not give me a definite date for the foreclosure sale. How can I learn when the foreclosure sale will occur? Do I have to keep paying the homeowner’s association monthly fees even though I no longer live in the home? Real property taxes?

Answer: First, any homeowner subject to foreclosure of their home should attend the foreclosure sale. Although many mortgage lenders have websites with information about foreclosure sale dates, under Arizona real estate law only the people attending the foreclosure sale have the right to learn about the postponement of the foreclosure sale and any new foreclosure date. Second, a lender can postpone a foreclosure sale indefinitely, subject to the six-year statute of limitations for enforcement of the mortgage loan. Third, you are personally liable for the homeowner’s association monthly fees, plus the reasonable maintenance of the home, until the foreclosure sale occurs. Therefore, in addition to paying the homeowner’s association monthly fees, you must keep the homeowner’s insurance policy current, including any endorsement for coverage of the home which is now abandoned. Finally, your real property taxes are a non-recourse obligation, and you have no personal liability for real property taxes. Any foreclosure of a real property tax lien will only occur at least several years after the real property taxes are delinquent.

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