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 Sale And 24336 Gitano Drive Murrietaca

California Land Title Association (CLTA) - This policy is generally issued to a lender in second position, or to the purchaser of a property.

When it comes to Loan to Value Ratio that concerns homes occupied by owners, you should never lend out a LTV that exceeds 60%, even if the home appears to be the most ideal of owner occupied homes. The closing should occur at your attorneys office, or at a Title Company. The Straight-Interest-Only Note V The straight-interest-only note, is one that does not require payments of principal during the life of the loan. Title insurance, and the process that is associated with the creation of a title insurance policy, provides the investor with an in depth examination of the property title and everything that affects it.

Tax Liens Tax liens have priority over deeds of trust.
To give you a general idea, most mortgages range from ,000 - ,000. For instance, the lender needs to consider inspections and lines. When a third party is involved, it becomes the loan servicing departments responsibility to bill the borrower for regular monthly payments. Because unlike other forms of insurance that provide coverage for unpredictable occurrences that could possibly happen in the future (such as life, health or casualty insurance), title insurance protects the party insured from loss that results due to events that happen before the effective date of the title insurance policy.

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.
And depending on the results of these factors, they can determine if there is an unpleasant effect on title clarity and even on value. Furthermore, contracts are reviewed to make certain that borrowed funds are sufficient to complete the project. However, you are in complete control over your investment, because you are the only one who owns your mortgage. However, despite their differences, each policy works to insure some the following (Note: The list below is only a small sample of the insurance provided by these two policies): The deed of trust that is insured is recognized as a valid an enforceable lien. When a third party is involved, it becomes the loan servicing departments responsibility to bill the borrower for regular monthly payments.