The 1099C for the Cancellation of Debt in a Short Sale in Arizona

Foreclosures is a situation in which a homeowner is unable to make full principal and interest payments on his/her mortgage, which allows the lender to seize the property, evict the homeowner and sell the home, as stipulated in the mortgage deal. One month after the homeowner misses a mortgage payment, he/she is in default and will be notified by the lender. Three to six months after the homeowner misses a mortgage payment, presuming the mortgage is still delinquent, and the house owner has not comprised the missed payments in just a particular grace period, the financial institution will get started to foreclose. Typically the farther behind the debtor falls, the more difficult it becomes to get up since lenders add fees for payments that are 10-15 days past due.

Each state has the own foreclosure laws within the notices the lender must post publicly and/or with the homeowner, the homeowner's options for bringing the loan current and avoiding foreclosures, and the method for promoting the property. In twenty-two states – including Florida, Illinois, and Ny : judicial foreclosure is the norm, meaning the lender must go through the courts to get authorization to foreclose by showing the borrower is late.

If the foreclosure qualifies, the local sheriff auctions the home to the greatest bidder to try and recoup what the bank is payable, or the bank becomes the owner and offers the home through the traditional route to recoup its loss. The entire contencioso foreclosure process, from the borrower's first, missed repayment through the lender's sale for the home, usually requires 480 to 700 days and nights, in accordance with the Mortgage Bankers Organization of America.

The other 28 states – including Arizona, California, Georgia and Texas – mainly use non-judicial foreclosure, also called the power of sale, which is commonly faster and does not go through the courts unless the homeowner sues the lender.

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