Are you practicing law without a license again?
Your implication is that the mechanic does not have a "legal" claim. This is in error, in most jurisdictions of which I am familiar, and I am reasonably certain that it would be that way in Arizona. Typically, a mechanic's lien is superior to a mortgage claim.
The mechanic may be under the same, erroneous assumption under which you seem to be laboring. I hope you have not been encouraging the mechanic to think that his claim has no legal standing, and thus should take what he can get.
Be careful about the assumptions you make, especially when you are operating out of your area of licensed expertise.