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.

Fetzerfirst Deeds Of Trust

Although, in some cases, depending on the state, sometimes the issue of a lost note can be resolved by means of a lost note affidavit.

What is a lien? For more information about Coppercrest Funding, or if you would like to learn more about becoming an active trust deed investor, you can visit them online today at www. ), know that by compounding an annual 10% interest through trust deed investments, they have the chance to take years off the necessary time required to reach the target date they have personally set for their retirement. Therefore, in order to obtain this priority, this needs to be verified before the closing of escrow.

The use of such loan proceeds can fund the installing of utilities, water pipers, sewers, streets, gutters, curbs and related utilities.
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. Regardless if you secure your trust deed investment through a single lender (whole) or by more than one lender (fractionalized), you will still need to follow certain rules and regulations as stated by real estate law. _ Only two parties are involved in a mortgage document - the lender and the borrower. There is no question that some borrowers will do everything in their power to try and avoid and delay making payments. Remember, the lower the number, the more equity the investor will receive on the property. This includes all legal costs, fees and expenses that you had to endure while processing the foreclosure, as well as those costs linked to having to take action in responding to the bankruptcy petition.

Most lenders are in agreement that on certain types of loans, you would require a lower Loan to Value.
The reason why such foreclosure actions are started is due to the fact that payments on the promissory note have not been made, or it could be that taxes and insurance are overdue. Obtain certified copy of escrow papers V The investor needs to obtain a certified copy of escrow papers, which is an escrow file that has been verified and signed by an agent of the escrow company and is considered to be a valid and accurate copy of the original document. This book has been designed to give you a good idea of the many golden opportunities that await you should you choose to invest in deeds of trust. 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.