American Eagle Mortgage Company has a first priority mortgage on

a shopping center owned by the borrower Acres, Inc.The property is

located in a state that requires judicial foreclosure, and the

procedure generally requires about a year to complete. Acres, Inc.,

is in default on the loan and has approached American Eagle to

arrange a deed in lieu of foreclosure in exchange for a full

release from the mortgage debt. American Eagle conducts a title

exam of the property and finds a second mortgage to Acme Finance

securing an unpaid debt of $$250,000.$ What risks does American Eagle

have if it receives a deed in lieu of foreclosure from Acres Inc.?

Is there anything American Eagle and Acres Inc. can do to structure

the deed in lieu$$of foreclosure to reduce the risks to

American Eagle? Explain your answers.