Phoenix Real Estate Lawyers Blog

The Department of Housing and Urban Development recently announced a $25 billion settlement between the five largest banks in the U.S. to address mortgage loan servicing and foreclosure abuses. The settlement includes Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial. Most of the $25 billion settlement is supposed to go toward reducing mortgage payments for troubled homeowners. 

There are two big ways this settlement differs from previous programs. For one, it's the only large-scale program that includes principal reductions. Banks will be required to do partial loan forgiveness. Secondly, compliance from the lenders is mandatory, which distinguishes it from other programs that have been voluntary. 

Bank of America Home Loans, one of the five major banks involved in the settlement, has purportedly been reaching out to customers who may be eligible for forgiveness of a portion of the principal balance on their mortgage under the terms of the settlement. 

Bank of America began sending out letters in a targeted outreach to more than 200,000 potential candidates for this assistance. The bank estimates average monthly savings of 30 percent on mortgage payments of customers who qualify for this program.

Continue reading "Bank of America to Extending Home Loan Modifications as a Result of Settlement " »

In a residential eviction action the landlord must first give the tenant written notice that the tenant has five calendar days to pay the rent. At a minimum, the five day notice must tell the tenant that the tenant is behind in the rent and state the amount of money the tenant must pay to cure the default. The notice must also tell the tenant that the lease will terminate unless the tenant pays the entire amount due on or before the expiration of five days from the date the tenant receives the five day notice. The notice may be hand-delivered to the tenant or sent by certified or registered mail. If the notice is sent by certified or registered mail, the judge will assume the tenant received the notice on the date the tenant signs for it, or five calendar days after it was mailed, whichever occurs first.

If the tenant does not cure the default, the landlord can file a forcible detainer complaint in court. Typically, forcible detainer actions in Arizona are filed in justice court. If damages are greater than $10,000, then the case must be filed in superior court. The complaint should ask for a writ of restitution (eviction), possession of the premises, all late rent, all late fees, rent due through the end of the current periodic rental period, the landlord's court costs, and attorney's fees if applicable. Attach a copy of the lease agreement and the five day notice to the complaint.

Trial is typically set by the court clerk three to six business days after the complaint is filed. The landlord must have the summons and complaint served on the tenant at least two days before the trial date. The tenant should be personally served with the summons and complaint either by a constable or by a private process server.

If personal service cannot be obtained, then the process server may post the summons and complaint on the front door of the residence within one day of filing the complaint, and on the same day the summons and complaint must be sent to the tenant's address by certified mail, return receipt requested. If the process server succeeds in obtaining personal service on the tenant, he will file an "affidavit of service" with the court. If the process server cannot personally serve the tenant, he will file an "affidavit of attempted service" with the court.

Continue reading "Under Arizona Law, How Do I Evict A Residential Tenant Who Does Not Pay Rent?" »

Bank of America is reportedly rolling out a new short-sale process which is designed to reduce the time it takes to obtain approval from the bank by as much as half. Purportedly, the reduced time to obtain a decision is a result of improvements in their management software. For more information, click here.

A short sale is a sale of your home for less than what is owed on it. Typically, after an offer is received, the seller has to obtain approval from the bank to release its lien on the property. Whether or not the balance of the debt owing on the property has to be repaid is a matter of negotiation between the bank and the seller.

The new process is set to make its debut this Saturday (April 14, 2012). Whether it will work or not only time will tell. But, even if it does not deliver as much of an improvement as promised, any changes which reduce the bank's processing time is long overdue.

For those of you with a Bank of America mortgage and considering a short sale of your home, keep in mind that this change does not mean the bank will view your short sale proposal more favorably - only that you will not have to wait as long to receive an answer. Yet, given that some short sale offers take months to get approval - this is a welcome improvement.

If you are contemplating a short sale, contact an attorney to review the terms of the agreement from the bank to make sure you are not liable for any deficiency.

As grandparents, parents or other family members grow older, they often get to a place where they need the assistance of others to make decisions regarding their person or the property. At those times when prior planning has not been accomplished or is not sufficient, Court intervention may be necessary in the form of a guardianship and/or conservatorship.

A guardian is a person appointed by the Court to make decisions for a Ward in regards to their health and where they live. A conservator is a person appointed to assist with making decisions about the Ward’s property and income.

Many times, these kinds of issues are resolved ahead of time with a healthcare power of attorney (for health matters) or a financial durable power of attorney (for financial issues). Even when these documents are put into place, it may still be necessary to involve the Court for any number of reasons, including refusal by the person needing assistance to consent to being moved, or because the healthcare power of attorney did not include mental health powers (giving the agent the right to commit a person to a mental healthcare facility), or because an institution refuses to acknowledge the power of attorney. Many other times, people simply have not engaged in prior planning in the first instance so that the only means to assist your family members is through the courts.

If you have a loved one who needs assistance under these kinds of scenarios, Court intervention may well be necessary. You should contact an experienced attorney to assist you with evaluating your situation and, if necessary, aiding you in obtaining a guardianship and/or conservatorship.

The National Association of Realtors (NAR)reports that President Obama's fiscal year 2013 budget presented to Congress in February, 2012 includes a recommendation to extend the mortgage cancellation tax relief provisions. Currently, homeowners who have their home foreclosed are not required to count the forgiven debt as taxable income. However, the provisions excluding the cancelled debt are set to expire on December 31, 2012. At the time of NAR's report, it was expected that bills would be introduced in both the House and the Senate in March, 2012.

In certain circumstances it may be necessary for someone other than a child’s parents to have custody of the child, often this is a grandparent and is sometimes referred to as Grandparent's Rights. If a person other than a child’s legal parent is seeking custody, there is a rebuttable presumption that it is in the child’s best interest to award custody to a legal parent. To rebut this presumption the non-parent must show by clear and convincing evidence that awarding custody to a legal parent is not in the child’s best interest.

In order to commence an action for non-parent custody, the non-parent must first file a petition in which the child is located or permanently resides. The petition must establish the following:

1. The person filing the petition stands in loco parentis to the child. “In loco parentis” means a person who has been treated as a parent by the child and who has formed a meaningful relationship with the child for a substantial period of time.
2. It would be significantly detrimental to the child to remain or be placed in the custody of either of the child’s living legal parents who wish to retain or obtain custody.
3. A court of competent jurisdiction has not entered or approved an order concerning the child’s custody within one year before the filing of the petition, unless there is reason to believe the child’s present environment may seriously endanger the child’s physical, mental, moral or emotional health; and
4. One of the following applies:


(a) One of the legal parents is deceased.
(b) The child’s legal parents are not married to each other at the time the petition is filed.
(c) There is a pending proceeding for dissolution of marriage or for legal separation of the legal parents at the time the petition is filed.

Notice of the custody action must be provided to the following parties:

1. The child’s parents.
2. A person who has court ordered custody or visitation rights.
3. The child’s guardian or guardian ad litem.
4. A person or agency that has physical custody of the child or that claims to have custody or visitation rights.
5. Any other person or agency that has previously appeared in a custody action involving the child.

If you are seeking assistance with custody issues for minor children, contact an experienced family law attorney

A new law went into effect in July, 2010 permitting vehicles to be transferred after the owner’s death without the necessity of probate. This new law permits the owner of the vehicle to name a beneficiary to receive the vehicle upon the owner’s passing in much the same way that a person would name a beneficiary to their life insurance policy or 401K, or leave real estate via a beneficiary deed. By doing so, the beneficiary avoids the need for opening up a probate, especially in the instance where the car of motor home are the only significant assets owned. This helps reduce the need for probate attorneys in relatively simple estate and avoid the legal fees associated with same.

To download the form from ADOT’s Motor Vehicle Division, go to azdot.gov and search under “Forms and Publications” listed in the right hand column. Then search under “B” for beneficiary. The form is listed as Form 96-0561.

Keep in mind that the owner will have to make sure his/her adult children or heirs know where the completed Beneficiary Designation form and current car title are so they can find them upon the owner’s passing. Then, all the beneficiary will need to do is present them to the Motor Vehicle Division to get the title changed into the beneficiary’s name.

Finally, remember that this is only a beneficiary designation and is not permanent or effective until the owner’s death. If the owner changes their mind about whom they wish to leave their vehicle to, they simply destroy the old form and prepare a new one. The named beneficiaries do not have any ownership rights to the vehicle until the owner’s passing, and there is no impact on the owner’s automobile insurance rates as a result of the named beneficiary.

If you need further assistance with this issue or other estate planning needs, contact an experienced estate planning attorney.

In the case of M&I Marshall & Ilsley Bank v. Mueller, 1 CA-CV 10-804, the Arizona Court of Appeals expanded Arizona's anti-deficiency protection (under A.R.S. § 33-814(G)) to protect borrowers whose property is foreclosed upon even while it is under construction, so long as they intend to occupy the home upon completion.

In that case, the Muellers purchased a plot of vacant land and borrowed $444,000 from M&I Bank to construct a single-family home on the property for their own use. To secure the loan, the Muellers executed a deed of trust with M&I. Construction on the home began in March 2007, but several months later the Muellers discovered that the contractor was behind schedule and much of the construction was defective. The Muellers asked M&I to advance loan disbursements to remedy the defects, but M&I did not disburse additional funds. As a result, the Muellers abandoned the property and defaulted on the loan.

M&I Bank conducted a non-judicial trustee's sale. After the trustee's sale, M&I Bank timely filed a lawsuit seeking a deficiency judgment.The trial court ruled that the Muellers were entitled to anti-deficiency protection under § A.R.S. 33-814(G) on the basis that the Muellers intended to live in the home upon its completion. M&I Bank appealed the trial court's decision. M&I asserted that the Muellers were not entitled anti-deficiency protection because a home was never constructed on the property, and therefore, the property was never "utilized" for a single-family home.

The appellate court rejected M&I's argument and upheld the trial court's decision. The court noted that the primary purpose of Arizona's anti-deficiency statutes was to protect homeowners from deficiency judgments. Since the Muellers purchased the property with the purpose of occupying the dwelling upon completion, the court found that the anti-deficiency statute protected the Muellers from a deficiency judgment.

Keep in mind this decision comes from the appellate court. It could easily go up for review before the Arizona Supreme Court. Banks would have a significant interest in seeing this decision reversed.

Contact an expereienced real estate attorney if you need assistance with your

Under a previous blog article titled “New Rules Coming for Fiduciaries” we noted the requirement of a fiduciary to give advance notice of a change in compensation. That rule became effective on January 1, 2012. This posting will flesh that requirement out a little more.

Under A.R.S. 14-5109 attorneys, fiduciaries, and other professionals involved in a guardianship/conservatorship case must give notice of intent to seek fees against a Ward’s estate when first appearing in the case. This notice must be filed with the court and a copy provided to all interested parties. There is no standardized form or format for giving this notice. However, the notice should give at least a general explanation of the compensation arrangement and how the compensation will be computed. Additionally, changes in a professional’s compensation schedule must be given at least thirty days in advance of such change. The statute does not specifically require it, but the best practice would be to also provide such notice in writing.

Claims for compensation (i.e. invoices) from attorneys and guardians ad litem appearing in a case must be submitted to the fiduciary handling the Ward’s estate within four months of incurring those costs and must be in writing. See A.R.S. 14-5110. If these claims for compensation are not provided within this four month time frame they are permanently waived.

Generally, these rules do not apply to trusts unless the trust is subject to court supervision or Ward or Protected Person is a beneficiary of the trust.

If you need further assistance understanding how these new laws might affect guardianship or conservatorship cases you are involved with, contact a competent probate attorney

On February 1, 2012, new rules will go into effect under the Arizona Rules of Probate Procedure which govern issues within the purview of the probate court. Most of these changes are directed at the rules governing guardianships and conservatorships, although trusts and decedent’s estates are implicated as well. A sampling of some of the rule changes include the following:

Rule 10.1 requires fiduciaries to exercise prudent management of costs including protecting against incurring costs that exceed probable benefits to the ward, protected person, estate or trust. Also requires fiduciaries, their counsel, the ward/protected person’s counsel or court-appointed counsel to timely disclose to the Court their belief that projected costs of complying with a court order may exceed probable benefits.

Rule 18 permits a party to file Notice that another party has made a repetitive filing for the same or similar relief within last twelve (12) months. Filing such a Notice stays the deadline for response or objection to the alleged repetitive filing until further order by court, but must be filed prior to the deadline for filing a response or objection to the alleged repetitive filing.

Rule 22 provides mandatory default language for court orders appointing a fiduciary in a case involving assets which will be restricted, unless otherwise ordered by the Court. The changes to this rule also requires language stating that the Order appointing a fiduciary is not effective until Letters of appointment are issued by the Court.

There are additional changes not mentioned here. Plus, more changes to the rules are coming which will be effective on September 1, 2012. Contact an experienced probate attorney if you have questions or need advice about these changes.

In 1998, Arizona incorporated into statute a new type of marriage called “covenant marriage.” To enter into a covenant marriage, the couple must first have counseling from a member of the clergy or a marriage counselor. Then, when applying for a license to be married, both persons must show their intention to enter into a covenant marriage by signing a special statement on the application form. In a covenant marriage, divorce may be granted by the court only for specific reasons. To get a divorce, any of the following reasons must be proved to the court:

• Adultery
• A spouse has committed a felony and been sentenced to prison or death
• Abandonment by one spouse for at least one year (absent from the home and refuses to return). Papers can be filed with the court prior to the completion of a year of abandonment if there is an expectation that the abandonment will continue, but the court will not move forward with the divorce until the year is fulfilled.
• A spouse has physically or sexually abused a spouse, a child or a relative who lives in the home
• A spouse has committed domestic violence - physical or emotional abuse
• The spouses have been living separate and apart for two years. Again, papers can be filed prior to two years, but the case will not move forward until the two-year requirement has been fulfilled.
• The spouses have already been granted a legal separation and have lived apart for one year
• Regularly occurring abuse of alcohol or drugs
• Both spouses agree to divorce

If you have questions about entering into a covenant marriage orabout dissolving a covenant marriage, contact an experienced family law attorney.

How to rebuild after a bankruptcy is one of the most often asked questions I hear when meeting with people who are considering bankruptcy. The question can differ slightly, such as how much of a hit will my credit score take or, when will I be able to get new credit or, how can I reestablish my credit? However it is asked, you will need to be intentional about rebuilding after a bankruptcy, and here are some thoughts and helpful hints about what that entails:

1. Obtain a copy of your credit report to ensure all the debts you discharged are correctly reported. If you do not see the discharge showing up after a couple of months, file a claim with the credit agency.
2. You will need to remain absolutely consistent in making timely payments on your mortgage or rent payments. The same holds true for your vehicle payments.
3. Surprisingly, because you have been discharged and are no longer in debt, you may be actively solicited by creditors. You should refrain from applying for too many credit cards too quickly.
4. Instead, you should slowly and methodically re-establish your use of revolving credit. You will need to pay the balance off each month. Make sure the credit you are applying for reports to all three credit agencies
5. Consider a secured credit card if you are unable to obtain an unsecured credit card. Secured credit cards require you to put funds on deposit with the lender in an amount equal to your credit line. Then, manage this account just as if it were an unsecured credit card by paying on time and in full.
6. Keep in mind that any credit you obtain right after your discharge will be expensive (i.e. your interest rates will be very high). Over time, you will get better rates, but only as you show you can properly manage your credit.
7. Rebuilding after bankruptcy is not just about re-establishing your credit. It is also about making positive changes to avoid getting into debt again. So, the single most important thing you can do is to establish habits that help you live well within your means.

If you have additional questions about how to rebuild after bankruptcy, contact a competent bankruptcy attorney.

The Probate Court often had difficulty putting an adult guardianship or conservatorship in place for a person in need of protection who was still a minor but was about to become an adult. In most cases, the petitions seeking the guardianship or conservatorship for an adult were filed prior to the child’s 18^th birthday in order to have protective provisions in place immediately when the child reached adulthood. However, this created a jurisdictional problem for the court because the child was not yet an adult when the petition was filed. The court’s response to these petitions was varied: some were dismissed, other were not acted upon until after the child’s 18^th birthday. This inconsistency led to SB1081 which created the new standby guardianship and conservatorship via A.R.S. §§14-5301.03 and 14-5301.04.

Under these new statutes a petition for a minor who needs protection can be filed when the minor reaches 17.5 years old. If the child is found in need of the guardianship or conservatorship when he/she becomes an adult, the court will enter the order granting the protection but which does not become effective until the person’s 18^th birthday. These new laws permit a better continuum of care for special needs children who are transitioning into adulthood. If you are the parent of a special needs teenager approaching adulthood who may need a guardian or conservator, you should speak with a knowledgeable attorney about this new option.

In Arizona, if the parents of a child were not married when the mother became pregnant or when the child was born, the child does not have a legal father until paternity is established. Until paternity is legally established, the biological father has no legal rights to the child, such as parenting time with the child, and no legal right to participate in major decisions about the child, such as medical treatment, education or religious training.

Paternity can be legally established in the following manners: 1) voluntary establishment through the court, 2) establishment by the court after filing a court case, 3) establishment through the state department of Economic Security (DES) and 4) establishment by automatic operation of law through the state Department of Health Services.

If the parents are not able to establish paternity voluntarily, either parent may file a Petition to Establish Paternity with the Superior Court. The court can then order that genetic testing be done. If the person claimed to be the father, is proven by genetic testing to be the biological father, the court will issue an order establishing legal paternity. The court also may enter orders regarding past and future child support, parenting time and legal custody.

Previously,we wrote about important changes taking effect on January 1, 2012 for those who serve in a fiduciary capacity. Click here for that article. A fiduciary’s compensation is often the subject of controversy and a great deal of acrimony can develop between the interested parties. To help provide guidance, especially within guardianship and conservatorship proceedings, the probate code is changing to give guidance on fiduciary compensation. Under the new A.R.S. § 14-5109 all approved fiduciary compensation must be “reasonable and necessary” and is applicable to those serving as guardians, conservators, and guardians ad litem, The statute is also applicable to attorneys who by virtue of representing a party will be seeking compensation from the estate of the protected person or ward.

The new statute requires the Court to consider the following factors when ruling upon pleadings seeking approval of compensation:

1. Whether the services provided any benefit or attempted to advance the best interest of the ward or
2. protected person.
3. The usual and customary fees charged in the relevant professional community for the services.
4. The size and composition of the estate.
5. The extent that the services were provided in a reasonable, efficient and cost-effective manner.
6. Whether there was appropriate and prudent delegation to others.
7. Any other factors bearing on the reasonableness of fees.

The person seeking compensation has the burden of proving the reasonableness and necessity of compensation and expenses sought. There are also notice requirements enumerated in this statute which need to be meticulously complied with. If you are a guardian or conservator, you need to review this statute closely.