Arizona Legal Question
Greetings Everyone!
I’m trying to put together a deal to help my nephew, whose house (in AZ) is going into foreclosure. I’ll spare you all details, but my plan is to buy his house and put him back into it on a lease option. My question is regarding the legality of the deal, as my down payment for his house will come back to me as his option money. Everything will be at FMV -- no short sale, no debt forgiveness, etc., so everybody’s getting what’s owed.
If I run to two concurrent escrows (my purchase and his lease option), is there any legal problems doing this in Arizona?
Thanks in advance for any advice!
Mike
When you purchase the property, you can put whomever in it that you want to. Be sure that the lender knows that this is not a owner occupied deal for your financing.
most of the advice on this site doesn't advocate leaving the current homeowners in place.
I know, this is family etc. Now that you're going to bail them out, would you have what it takes to move them out if they can't live up to the terms of the lease option you're getting into with them?
How has their situation changes from when they fell behind in the first place. The kind hearted relative is always more willing to let things slide a bit when times get rough.
If you have already considered all of this, go ahead with the deal. Nothing illegal about it that I know of.
Jeff
P.S. The above was predicated on the assumption that when you buy the house, You're buying the house. New financing etc.[ Edited by jeff12002 on Date 01/25/2004 ]
Hi Jeff,
Thank you for your response. I really appreciate the input. He has a couple of temporary things going on now that has created his current situation. He’s been in the house 6-8 years and has a good deal of equity – but just can’t get to it. The deal I’m putting together is (effectively) zero down for me, clears all his debt, leaves a reserve fund, he has the same payments as before, and all lease payments will be made through a third party. So if he defaults again, well... an eviction’s better than a foreclosure. For both of us.
And yes, I’m buying the house outright with all new financing – not just bailing out his current situation.
Thanks again!
Mike
Also be aware that it has been ruled by various courts around the country, in some transactions, that a L/O, then leaving the old owner in the house, was in actuality a LOAN, at higher than legal interest, and therefore VOID!!!!!!!!!!!!!
So my advice is to only close the L/O deal on their giving you the key and proving they're gone & outta there.