Legal Question in Real Estate Law in Arizona

Re: Changing Title to the Property in Pre-Foreclosure

I think you'll need an Arizona lawyer's opinion on this, but I would think that if the loan that's going to be foreclosed was made to the LLC, on the basis of the LLC's application and its credit, then the property should stay in the LLC's name. My reasoning is that a transfer to a stranger to the loan on the eve of foreclosure smacks of fraud. A transfer is fraudulent if done with the intent to "hinder, defraud or delay" of the transferor's creditors, and in some cases the transfer is fraudulent even if there was no intent to hinder, defraud or delay, but that was the result.

On the other hand, there's another set of facts which might fit the situation here. Your facts mention "transferred back to the individual's name." Does this mean the property was purchased and the loan taken out in the name of an individual, and then transferred by the individual to the LLC, perhaps without the lender's permission or even its knowledge? If so, uh-oh, you may have another problem; check the loan terms to see what they say about due-on-sale-or-transfer.

I recommend a personal consultation with an Arizona real-property attorney.