Arizona Lawsuit Against Investors
By Jeffery S. Watson
On March 7, 2025, a complaint was filed in the Superior Court of Arizona in Maricopa County by the Attorney General of the State of Arizona, Kristin K. Mayes, which laid out allegations regarding a scheme by the defendants to strip Arizona homeowners of millions of dollars of equity in their homes. The AG defined equity stripping schemes as targeting homeowners with significant equity facing foreclosure, where high-equity homes are worth more than the mortgage balance in foreclosure.
The complaint focused on investors engaging in activities to prevent distressed homeowners from receiving excess cash by tricking them into selling homes below market value.
The complaint alleges that equity strippers trick homeowners into signing paperwork and rely on lawyers and title companies to close transactions.
As an attorney and real estate investor, I want to share some takeaways after reading this complaint:
- Know the laws in your state: Understand foreclosure protection statutes.
- Tell the truth: Avoid false statements and deceptive tactics.
- Use earnest money: Demonstrate seriousness and good faith in negotiations.
- Review marketing: Ensure messages align with business ethics.
- Manage entities: Keep operations simple and compliant.
- Understand equity stripping: Compensate homeowners fairly.
- Approach partnerships carefully: Avoid conflicts and legal issues.
- Teach legally and ethically: Share accurate and tested information.
Jeffery S. Watson is an attorney with over 25 years of trial experience. He provides insights on investing and wealth protection. Visit WatsonInvested.com to read more of his viewpoints.