Chapter 9 - Lien Priority

You may or may not be aware, but a deed of trust is actually a lien on a piece of real property. What is a lien? A lien is a legally recognized claim or hold against one persons item by another which utilizes this item as security for a duty, debt or obligation. If there is more than one lien on a piece of real property there could be a number of reasons for this. Some of the liens an investor may encounter include:

? Tax liens
? Mechanics liens
? IRS liens
? Judgment liens
? Etc.






A few interesting facts about liens
It is important for you to know that liens in first priority are the most ideal. Therefore, in order to obtain this priority, this needs to be verified before the closing of escrow. In order to obtain the accurate information that is required to verify the priority of the deed of trust, you will find that Title insurance policies will provide you with what you need to know.

If it happens that an error is made, or a lien has been overlooked and such aspects affect the trust deed holder, then the holder can take legal action against the company that issued the title insurance policy.

When the holder is in possession of the priority lien, they can foreclose and any junior lien holders wont be able to stop it. That being said, there are ways in which junior lien holders can protect themselves should this happen.

To begin with, they can make certain that their lien has been accurately recorded with the county recorders office. They can also inform all senior lien holders about their lien, and ask them for written notification before they foreclose.


Tax Liens
Tax liens have priority over deeds of trust. This is a fact you wont want to forget should a tax lien appear. Thus, in order for the investor to protect themselves in the event of a tax lien, a provision should be added in the trust deed and note that explains if the borrower and their property have or will receive a tax lien; it is the trustors responsibility to contact the investor.

In addition, the note should provide the investor with the choice of needing the payoff, so that they can protect their principal from foreclosing on the tax lien.

Trust Deed Locate

Make sure you understand all legalities concerning trust deeds before you make your investment.

Trust deeds sell fairly easy because they are liquid5. Their creative skills give Coppercrest Funding a unique advantage over other lenders, because they provide direct loans that are underwritten. However, you are in complete control over your investment, because you are the only one who owns your mortgage. The trust deed is what will secure the repayment of funds that are owed according to the conditions of the note, and will then become a lien on the property. Chapter 5 - Legal Issues for Investors When you invest in a trust deed there are certain legal issues that you need to consider.

Casualty and Fire Insurance V Insurance is imperative when it comes to making a trust deed investment; because as an investor you will want to ensure that you have sufficient insurance to protect your investment.
Furthermore, Coppercrest Funding will never fully rely on appraisals, and will confirm values by utilizing their own internal comparable sales analysis through an interviewing process with real estate brokers familiar with the area in question. Thus, even if you have a copy of the original, it will not suffice because only the original note is considered to be the life of the transfer. All that appears is what is displayed within the policy. However, if an escrow involves tax and legal problems and is extremely technical, than the investor should seek the advice of an attorney. Once you have completed all of the necessary instructions and requirements for escrow, and it begins to take its normal course, you are now ready to close escrow which is often referred to as close of escrow, closing or settlement.

What is the difference between a mortgage and a deed of trust?
Are their Precautions I should take? That being said, it is recommended that you only invest money you will not need returned to you quickly. If the investor has the first deed of trust, then there will be no other lien before theirs. _ Declaration of Default (DOD) Notice of Breach (NOB) and the election to sell under the deed of trust.