REAL ESTATE FINANCING ARTICLES
Is buying a property tax lien always a ‘win-win’ bet?
Question: Our son recently graduated from college with a finance degree. He is convinced that the way to make a fortune is to buy property tax liens for ‘pennies on the dollar’ at the auctions by the treasurer’s office for delinquent property taxes, held every year in February. Our son says that if, after at least three years, the property owner doesn’t reimburse him for all of his costs, he can foreclose on the property. My son says it’s a ‘win, win’ investment as he comes out ahead either way. He now wants his mother and me to give him…
Transferred Military Personnel Having To Pay Delinquent Rent
Question: In a recent column you said that a serviceman being transferred to the Presidio base in San Francisco would be required under Arizona law to pay two weeks’ delinquent rent on their West Phoenix home. My understanding is that under federal law all military personnel have protection from payment of delinquent rent. For example, if a serviceman gets called up now to immediately go to the Mexico border to assist in the proposed deportation program of illegal aliens, the serviceman should not have to worry about paying delinquent rent. According to your resume you were Marine Corps JAG, so…
Amendments to Contract Require Consideration
Question: Under our January 15 contract with our homebuilder for construction of a new home in Buckeye, we had a closing date of October 15. A month later the homebuilder’s sales agent emailed us that the home should be completed by September 1. In reliance on her email, we “locked in” an interest rate for September 1. The homebuilder, however, failed to complete our new home until the scheduled closing date of October 15. Due to this delay, we lost thousands of dollars because of a higher interest rate. Do we have a claim against the homebuilder based on their…
Contract Contingent on Buyer Qualifying for Financing
Question: My husband and I signed an offer to buy a home in east Mesa, but the seller wants $30,000 earnest money. If we don’t qualify for the mortgage, will we lose our $30,000 earnest money? Answer: Probably not. Under the standard AAR purchase contract, the purchase of the home is contingent on the buyer qualifying for the mortgage. Two other important contingencies in the purchase contract are the approval of the title report and the approval of the home inspection by the buyer. Bottom line: If you do not qualify for financing, or approve the title report, or approve…
A New House. Some Old Debt. What Takes Priority?
Question: We want to buy a Phoenix home for $800,000 with a $640,000 mortgage loan. During the Covid catastrophe two years ago, however, our art framing business was ruined. The result is that two credit card companies now have judgments against us for more than $50,000. Our mortgage broker told us that we should still be able to qualify for the $640,000 mortgage loan without paying off the two credit card judgments because an Arizona statute (A.R.S. §33-705) says that the $640,000 mortgage loan will have priority over the two earlier $50,000 credit card judgments. The title company, however, is…
Issue With Home Equity After Refinancing First Mortgage
Question: We bought our Glendale home in 2008 with a first mortgage loan of $200,000. At the same time we got a $100,000 Home Equity Line of Credit (“$100,000 HELOC”) from the same mortgage lender. We have never borrowed any money on the $100,000 HELOC. Last year we refinanced the first mortgage loan with a new $350,000 mortgage loan, which was used to pay off the $200,000 first mortgage loan, and the remaining $150,000 we used for landscaping and an extra bedroom. Everything was fine, and we have made several monthly mortgage payments to our new $350,000 mortgage lender. We…
Wife Has Lien On Home Husband Purchased Before Marriage
Question: I purchased a home in Casa Grande. My wife and I were married a year later. All of the monthly mortgage payments and repair costs since our marriage have been made from our joint checking account. My wife says that she is unhappy, and that she talked to an attorney who said she has a lien on our home now even though she was never added to the title. Does my wife have a lien on our home now? Answer: Probably. Although the title to the home is in your name only, the monthly mortgage payments and repair costs…
Will Seller Carryback Financing Be Jeopardized If Buyer Is A Drug Dealer?
Question: We are selling our Carefree home. A young man has made us an offer to purchase our Carefree home for $600,000. There will be a down payment of $250,000 cash, and financing by a $350,000 seller carryback loan from us. This $250,000 cash is apparently from the young man’s successful real estate investments, but the young man cannot qualify for a $350,000 mortgage loan. We think that this young man could be a drug dealer. If we sell our Carefree home to this young man and the FBI seizes the home for drug dealing, will we lose our $350,000…
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