7.8 Mortgagee in Possession.

• Jurisdiction: Arizona

Under Arizona law, a mortgagee may lawfully acquire possession of the mortgaged property. This right is reconciled with the right of the mortgagor to remain in possession by means of an assignment of rents in the mortgage documents. A.R.S. § 33-702(B)(2) providing that an assignment of rents may be enforced by the “mortgagee or beneficiary taking possession of the property.”

Some general rules pertaining to a mortgagee in possession outlined in G. Nelson & D. Whitman, Real Estate Finance Law §§ 4.24–4.32 (4th ed. 2001) are as follows:

(1) The mortgagee in possession is liable to third parties for failing to perform the legal duties...