Legal Question in Real Estate Law in Arizona

Deed in Lieu of Foreclosure

We own a total of four properties in Arizona, three in my husband's name and one (our primary residence) in mine. We purchased the three properties as investments just before the market cooled. We attempted to sell two of the properties but we couldn't get enough to pay off the mortgages, so we have rented them out. The third property is still being rennovated, and remains empty. The rental income does not cover either mortgage. We own a home-based business and have been barely able to pay the mortgages within the 30-day window each month. I don't know if we will be able to continue doing that until the market goes back up, assuming that it ever does. I'm trying to find out what my options are.

I am aware that I could do a ''deed in lieu of foreclosure'', but I have been unable to determine how that is impacted by the lease agreements on the two properties. Will the lender accept the deed if there is a lease agreement? Will the lender evict the tenant? Can the tented then sue me? If the market value of the property is less than the loan about, will the lender still take a deed in lieu?


Asked on 10/12/06, 2:59 pm

1 Answer from Attorneys
James Jenkins Jenkins Law Center PLC

Re: Deed in Lieu of Foreclosure

There is something you can do, and you have several alternatives, but I have to say that the solutions are quite detailed and beyond the scope of this simple question and answer format. Also, more facts are crucial before giving a truly professional opinion. The deed in lieu is not without drawbacks and damage to your credit. On the other hand, a foreclosure is also grim. A short sale may be the answer, but I cannot say without a review of more facts and your documents.

This is why we offer a free, no obligation consultation in person (when complex and documents are involved) or on the phone (not appropriate in your case. If you want that free consultation call 480.835.1500. Yours is not an uncommon problem unfortunately.

Best regards,

James D. Jenkins

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Answered on 10/13/06, 4:00 am


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