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 Funds

At the same time every month, statements and a check that covers the interest earned throughout the month are mailed to the investor(s).

_ Trust deeds, on the other hand, are purchased and sold through brokers, but can also be purchased and sold privately at no extra charge. And depending on the results of these factors, they can determine if there is an unpleasant effect on title clarity and even on value. American Land Title Association (ALTA) V This policy is generally issued to a lender who holds a deed of trust in first position. Coppercrest Funding, is one of Arizonas leading sources of non-institutional, short term real estate loan providers, is a dynamic and professional company that specializes in providing real estate loans that are not usually obtainable by conventional lenders.

Names of both the buyer and seller as well as their proper title (ex: joint partnership, corporation, individual person, and so on) 3.
When it comes to bankruptcy, the investor will require the assistance of an attorney to appear in court, in order to request that relief be granted from the automatic stay. A power of attorney can be implemented to allow another individual to act on behalf of the absent party and sign for them. As for a non-monetary default, reasons for foreclosure could include an acceleration clause default because the borrower transferred the encumbering or title property in violation of the provisions outlined in the deed of trust. Coppercrest Funding underwrites, solicits, processes and funds private money lending, and is extremely reliable because they have more than 25 years of experience in real estate lending. Dont forget, the more you learn about trust deed investments, the safer the risk and the higher the potential for excellent return.

Note: Property can also be foreclosed by a senior lienor or through a deed in lieu.
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. Know how to recover your investment when the borrower does not meet payment. A trust deed is used as security for a loan on real property, and the specifics regarding the loan are written in a promissory note. The reason is because LTV means to loan a percentage of money that is less than the actual property value. _ The security position of the stock owner is shared among thousands of other holders.