Legal Question in Real Estate Law in Arizona

Home foreclosure, new mortgage and bankruptcy

My mom owns 3 homes, 2 purchased

within the past

3 years. Due to the real estate

market, she is

getting ready to default on the

mortgages and file

bankruptcy.

My wife and I have been renting one

of the homes

since purchase (3 years). Since the

home we are

renting will be sent back to the bank,

we will need to

find a new place to live. The plan is

to keep living in

the house and paying my mother

rent (until the

bank reposseses the house) , she will

cash the check,

(so we have proof we've been paying

rent on time,

etc) but keep the money in a

savings account so

that when my wife and I try to buy a

house later,

she will 'gift' that money to us so we

will have that

money for downpayment.

1st, will that money be in jeopardy

due to her bankruptcy?

2nd, is this fraudulent? We'd rather

not go through with this plan if it's

legally dubious.

Thanks,


Asked on 3/30/08, 5:35 pm

1 Answer from Attorneys
Brian Blum Blum Law Office, PLC

Re: Home foreclosure, new mortgage and bankruptcy

If the savings account is in your mother's name, then it will be lost in the bankruptcy.

If you and your wife are planning to buy a house soon anyway, why not buy the house you are renting? I think you and your mother should contact the bank and work something out. This would save your mother from having a foreclosure and might get you a good deal on a house.

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Answered on 3/30/08, 6:23 pm


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