Encumbrances

There are basically two ways in which a judgment creditor can collect a debt:

1 Force the sale of the liened property; and 2 Out-wait the judgment debtor.

What are the advantages to the buyer of a Trust Deed over a mortgage?

1. No deficiency judgment is permitted under an owner occupied residential trust deed. Under a mortgage, a deficiency judgment is permitted in all cases except when the mortgage is a purchase money mortgage. 2. Under a trust deed, a lender cannot exercise the right to accelerate the loan until the fifth day prior to the date set for the sale. This allows the borrower up until the fifth day prior to the date set for the sale to reinstate the loan by bringing all delinquent loan amounts current. If the lender had the right to accelerate the loan, as is the lender's right under a mortgage, the entire principal loan balance would be due and not just the past due amounts. If a lender accelerates a loan, it is almost impossible for a borrower to clear the default, short of obtaining a new loan.

encumbrance

A burden. A claim, charge, or liability that attaches to and is binding on real estate.

Land Sales Contract in-depth definition

A contract for the sale of property, by which possession is delivered to the buyer, but title remains with the seller until full payment or the satisfaction of other stated conditions.The land sales contract does not create a lien against title, but it does create a cloud on the title.

estoppel certificate

A document in which a borrower certifies the amount owed on a mortgage loan and the rate of interest OR a document signed by the tenant in which certain lease terms are verified,

judgment lien

A legal claim on all of the property of a judgment debtor which enables the judgment creditor to have the property sold for payment of the amount of the judgment. it is irrelevant as to what gave rise to the obligation to pay.

Mortgage

A legal document used to secure the performance of an obligation, in which the borrower or mortgagor agrees to pledge property to secure the debt represented by the promissory note. (A contract).

Foreclosure (Short definition)

A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the note.

purchase money mortgage.

A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing. The buyer in a purchase money mortgage typically gives the seller a certain percentage of the sale price as a down payment. The seller then agrees to accept the balance of the purchase price from the buyer ("loans") according to an agreed upon payment schedule.

encroachment

A physical object intruding onto neighboring property, often due to a mistake regarding the boundary.

trust deed concept?

A trust deed uses the concept of a trust to secure the borrower's obligations under a promissory note. It is a three-party instrument:

Is a lien an encumbrance?

All liens are encumbrances, but not all encumbrances are liens.

The Oregon Trust Deed Act gives the beneficiary the options to..

Although most lenders, when faced with a default on the part of a borrower indebted under a trust deed, foreclose using the trustee sale process, there may be occasions when the lender would prefer to accelerate the loan and demand the entire remaining principal balance due. The Oregon Trust Deed Act gives the beneficiary the option of filing suit in a court of law for foreclosure, as though it were a mortgage. If this procedure is used, it must be judicially foreclosed, and opens the door for a deficiency judgment. However, the borrower then has the statutory 180-day right of redemption. Another option for the lender in the event a borrower defaults, is to sue on the note and waive the right to foreclose under the mortgage or trust deed, thereby allowing the lender to execute on all the borrower's assets. This option is usually used when the lender calculates there is a greater likelihood of realizing the full amount of the loan from the total assets of the borrower, as opposed to the asset that is subject to the trust deed.

Easement Appurtenant

An easement which is annexed to the ownership of one parcel of land that allows one party the use of his or her neighbor's land and which runs with the land when the title is transferred to another party. An easement appurtenant results in a dominant tenement (the land that benefits from the easement) and a servient tenement (the land burdened by the easement).

cloud on title

Any document, claim, unreleased lien, or encumbrance that may impair the title to real property or make the title doubtful; usually revealed by a title search and removed by either a quitclaim deed or suit to quiet title.

Who can bid cash on a house that is in a execution sale or a sheriff's sale?

Anyone can bid on the property at the sale, including the mortgagee (the lender who filed foreclosure). All have to pay cash except the mortgagee. The mortgagee's bid does not have to be in cash since, as lender, they have already paid cash to the borrower.

Property tax liens

Are liens for the payment of real property taxes. In Oregon, if property taxes are not paid in full within three years from the May 15th due date, on May 16th the property becomes subject to foreclosure. Property tax liens are the highest priority lien possible and must be paid before any other debts against the property.

Does a recorded land sales contract create a lien on the seller's title?

Because the seller is the lender in a land sales contract and the title remains with the seller until the buyer pays the balance of the loan in full, a recorded land sales contract does NOT create a lien on the seller's title.

When are deficiency judgments allowed?

Deficiency judgments are permitted in the case of hard money mortgages but are not permitted in the case of purchase money mortgages.

profit a prendre or otherwise known as profit

Easement right to go on the land of another and right to sever and own something from the land, such as gravel, trees, crops or water. Because the holder of the profit must enter the land to remove the resource, every profit a prendre comes with an implied easement.

financial encumbrances

Encumbrance that affects the title. Examples: Mortgages Trust deeds,Judgments Attachments,Notices of Pendency, Construction Liens, Property Taxes, Special Assessments, Income Tax Levies

non-financial encumbrances

Encumbrance that affects the use of the property. Examples: building restrictions, and zoning requirements and encroachments,. Easements, Licenses, Encroachments Profits Tenancies for Years Periodic Tenancies Clouds on title (an irregularity in the chain of title; a title defect)

party wall easement

Exist when a single wall is located on the lot line that separates two parcels of land. Either a fence or wall of a building, each lot owner owns that portion of the wall on his land., plus an easement in the other half of the wall for physical support. It is an easement appurtenant.

deficiency judgment

If the property does not sell for the judgment amount, the mortgagee can ask the court for a deficiency judgment. deficiency judgment

Define deficiency judgement

If the sale does not net sufficient proceeds to satisfy the outstanding debt, the secured party can proceed against the debtor for a deficiency judgment

Example of liscense

John gives his neighbor Steve a license to cross his land to access a pond on John's property during duck hunting season.

trust deed

Just as with a mortgage this is a legal document by which a borrower pledges certain real property or collateral as guarantee for the repayment of a loan. However, it differs from the mortgage in a number of important respects. For example, instead of there being two parties to the transaction there are three. There is the borrower who signs the trust deed and who is called the trustor. There is the third, neutral party, to whom trustor deeds the property as security for the payment of the debt, who is called the trustee. And, finally, there is the lender who is called the beneficiary, the one who benefits from the pledge agreement in that in the event of a default the trustee can sell the property and transfer the money obtained at the sale to lender as payment of the debt.

What are the differences between non-possessory licences and easements?

Licenses to use property in a non-possessory manner are similar to easements. Some general differences are: 1 A license is revocable at will and is typically limited in term and limited to the person given the license 2 A license is uninsurable 3 A license is generally not recorded

Examples of involuntary liens are:

Mechanics liens Judgment liens Property taxes and special assessments Federal and state tax liens

Specific financial liens

Mortgage Trust Deed Land Sales Contract Judgments Lis Pendens Writ of Attachment Construction Liens Property Taxes Special Assessments Income Taxes

secure liens

Most liens are secured liens. Secured liens are sometimes referred to as specific liens or special liens. Examples of liens in this classification are mortgages, trust deeds, property taxes, special assessments, and construction liens. A secured lien is one that is filed against a specific piece of property as the security for the payment of a debt. When the property is pledged as security, it is known as collateral.

hard money mortgage

Most mortgages involve money borrowed from a 3rd party lender. This type of mortgage is known as a hard money mortgage since actual hard cash was given by the lender to the borrower. Hard money is cash.

judgment lien example

Mrs. black sued Mr brown for failing to return the clock. mr brown ignored mrs blacks lawsuit and she won a judgment of $1000. the court encumbered mr browns property so that when he tried to sell it 3 years later, he was unable to take any profit from the sale until mrs black was first pait this is

Does an easement in gross have both a servient and dominant tenement?

No.The important characteristic of an easement in gross is that it confers the limited right to use another's land and it is not created for the benefit of any land owned by the owner of the easement. The land over which the easement in gross crosses is burdened by the easement and is known as the servient tenement. Since the easement right is personal and does not benefit another parcel of real property, there is no dominant tenement.

writ of execution

Order directing the sheriff to seize and sell the defendant's nonexempt assets or property. This has to be signed by a judge before the seizure of property is carried out. More than one property can be listed in the writ, in which case the sheriff will sell the properties in listed order until the full amount of the judgment has been paid.

What type of mortgage theory does Oregon use?

Oregon is a lien theory state.

Common-law definition of purchase money mortgages in Oregon

Oregon law expanded the common-law definition of purchase money mortgages to include loans in the amount of $50,000 or less if the loan is for the borrower's primary or secondary personal residence. These loans are considered purchase money mortgages even if the loan proceeds were obtained from a third party lender and are not subject to deficiency judgment.

example of a lein

Owner Ed hired Contractor Sarah to make some changes to the interior of his new house. However, Ed ran out of money and wasn't able to pay Sarah when she completed the job. Without Ed's permission and by following statutory law, Sarah was able to successfully file a lien against Ed's property to secure the debt he owed her for working on his house.

deficiency judgment

Personal judgment levied against the borrower when a foreclosure sale does not produce sufficient funds to pay fully the mortgage debt

Covenants, Conditions and Restrictions (CC&Rs)

Restrictive covenants are restrictions placed on a landowner's use of land by a non-governmental entity or individual, usually a developer. They are also referred to as Deed Restrictions.

example of unsecured lien

Sally has a judgment against her for $3,000, which is recorded in Marion County, Oregon. All of Sally's personal property and real property are subject to execution in order to satisfy the debt.

The advantages of this non-judicial foreclosure (Trust deed forclosuer) procedure for the lender are:

Since a judicial procedure is not required, the costs to foreclose are less than to foreclose a mortgage. The borrower does not have a statutory right of redemption after the trustee sale. The borrower's interest in the property is extinguished 5 days prior to the trustee sale and must vacate the property within 10 days after the sale. As a result, the successful bidder is entitled to a trustee's deed within 10 days of the sale. There is no 180-day redemption period. That fact induces a buyer to pay more for the property.

which tenancies are encumbrances?

Tenancies for years and periodic tenancies are both encumbrances

Subordination

The act of making an encumbrance secondary or junior to another.

hypothecation.

The act of pledging collateral to secure payment of a debt

Proceeds over and above the amount of the mortgagee's judgment amount are paid to who?

The borrower or mortgagor

According to Oregon law, what are the requirementsr of recording of all land sales contracts

The contract must be recorded within 15 days of the date the parties are bound by the instrument. Recording provides constructive notice that the property is not available for sale to additional parties. Oregon law also prohibits any language or provision excepting the contract from recordation. Such language or provision renders the contract void. Oregon law requires the recording of all land sales contracts exceeding a term of 12 months.

What is the difference between force the sale of a judgment debtor's property and foreclosure?

The main difference between the two, is that in the case of a mortgage, the lien is secured by a specific property of the debtor. In the case of a judgment, a general lien is unsecured, and includes all of the property of the judgment debtor in the county in which the judgment is recorded. Since the judgment lien is not secured by a specific property, the foreclosure process is not available to a judgment creditor. Instead, since the judgment is a general lien on all of the property of the judgment debtor in the county, a judgment creditor must file a writ of execution with the court.

lienee

The owner of a property that has a lien placed against it

grantor in title negotiations

The party borrowing the money in a trust

trustee in title negotiations

The party who has the power to sell the property if the loan is not paid is the trustee. As long as the borrower is not in default the trustee simply holds the right to the power of sale.

Who has priority in a lien for payments received?

The priority of liens is statutory, which means the priority for payment is defined by law.As a rule, property taxes and special assessments are ahead of all others, regardless of the recording date or the year for which the taxes are due. Construction liens have a special priority and enjoy a priority over some other recorded liens. The general rule of lien priority is that rights are apportioned according to the date when documents were recorded in the public record. The date of the document has no bearing on priority, but the date of recording does. If a party is given a lien on January 1, but does not record it until September 1, it will be subordinate to all liens recorded before September 1.

Why would a judgment creditor opt to wait until the debtor sells thier home to collect over having a court proceeding?

The usual reason is that if the amount of the judgment is relatively small, or the judgment creditor simply does not want to go through the court process necessary to force a sale, they choose to wait because it makes financial sense.

Mechanics Liens

These liens are recorded against a property by contractors, subcontractors, and material suppliers to ensure the payment of amounts due for labor and/or materials on new construction, land improvements, or remodel projects. In Oregon, contractors' liens are governed by statute. The procedures to file these types of liens involve a strict adherence to statutory time lines, notice, and filing procedures,

A few examples of common restrictive covenants are:

Type of roofing material required, requirements for yard maintenance, exterior paint colors, prohibitions against exterior antennas, satellite dishes, basketball hoops, etc. Minimum square footage of structures, type of exterior siding materials, fencing material and heights, prohibition of political or other signage

"First in time is first in line."

With few exceptions, lien priority is by the date of recording.

Private covenants are enforceable by

a homeowners association. (HOA). or by an action brought by another homeowner in the subdivision. Some restrictive covenants also provide for fines or enforcement fees.

Subordination of lien, or subordination, occurs when

a lien holder releases their priority of claim (gives up their position in line), thereby allowing a subsequent lien holder to establish a greater priority. This is accomplished by a subordination agreement.

Under Oregon law, the trustee (The party who has the power to sell the property if the loan is not paid ) must be

a neutral third party. The trustee can be statutorily defined organizations or entities such as title companies or attorneys. Since Oregon is a lien theory state, the trustee holds one of the sticks of the bundle of rights until the debt is fully retired - that of the right to sell the property at a public auction to satisfy the underlying promissory note in the event the borrower defaults on the payments. The concept of the trust is present in a trust deed because the trustee holds the limited power of sale in trust for the beneficiary during the term of the loan.

statutory right of redemption

a right under which mortgagors can redeem or purchase their property back after a judicial foreclosure for a limited time of 180 days

A lien is

a type of security interest against a property that is pledged as security for the payment of a debt or for performance of some other obligation.

unsecured lien

also known as general liens, the right of a creditor to have all of a debtor's property both real and personal sold to satisfy a debt.

general liens

also known as unsecured lien, the right of a creditor to have all of a debtor's property both real and personal sold to satisfy a debt.

Trust deeds

an alternative to the mortgage. Because a mortgage takes a long time to foreclose, is subject to the statutory right of redemption, and is expensive to foreclose, lenders do not favor them as a security instrument for a loan.

land sales contract simple definition

an arrangement in which the owner of real property sells property to a purchaser AND EXTENDS CREDIT TO THEIR PURCHASER.

Some common examples of easements in gross

are sewer lines, gas lines, electric lines, cable lines etc. For obvious reasons, the ability to assign a commercial easement in gross is important. For example, if ATT Cable Division is bought by another cable company, the easements for cable lines crossing various properties will be assigned to the new company. It should be noted that commercial easements in gross provide for the right to cross a property with the physical cable, pipe, power line and the like, as well as the right to reenter the property after the initial installation for maintenance, repairs, updates, etc.

specific liens or special liens

both are another term used for secure liens

define voluntary lien

contractual and voluntarily filed against a property with the consent of the property owner.

voluntary lien

elective liens

profit a prendre

french for "right of taking"

Judgment liens

general liens that arise out of a lawsuit where one party has won a monetary judicial award over another party. The party winning the lawsuit will file an abstract with the judgment in the county in which property of the losing party is located. The amount of the judgment then attaches to all property owned by the losing party in the county in which the judgment is recorded.

Easement in gross

gives the owner of the easement the right to use real property for a particular purpose. An easement for the benefit of a person or utility company rather than for the benefit of adjacent landowners. Most easements in gross are for commercial purposes, are not revocable, and can be assigned. Some common examples of easements in gross are sewer lines, gas lines, electric lines, cable lines etc. For obvious reasons, the ability to assign a commercial easement in gross is important. For example, if ATT Cable Division is bought by another cable company, the easements for cable lines crossing various properties will be assigned to the new company. It should be noted that commercial easements in gross provide for the right to cross a property with the physical cable, pipe, power line and the like, as well as the right to reenter the property after the initial installation for maintenance, repairs, updates, etc.

Federal or State Tax Liens

involuntary liens arise when either federal or state taxes are not paid. The government has the right to file a lien and secure the unpaid taxes against any real property owned by a taxpayer.

Foreclosure

is a legal process that is initiated by filing suit in the proper court having jurisdiction over the property that is the subject of the mortgage. In the suit, the lender asks for a judgment for the amount owing under the loan, along with all of the costs to sue the mortgagor, such as attorney's fees, collection costs, unpaid interest, and late charges. The suit also asks the court to order an execution sale or a sheriff's sale. This order allows the property to be sold to satisfy the judgment for the amount owed. The property is then sold at a sheriff's sale. Anyone can bid on the property at the sale, including the mortgagee. The winning bidder must pay cash in the amount of their bid. The mortgagee's bid does not have to be in cash since, as lender, they have already paid cash to the borrower. Any surplus proceeds over and above the amount of the mortgagee's judgment amount are paid to the borrower. If the property does not sell for the judgment amount, the mortgagee can ask the court for a deficiency judgment. A deficiency judgment becomes an unsecured general lien on any property that the borrower owns in the county where the deficiency judgment is recorded.

Encumbrances

is a right in property that burdens the title or limits use. A common characteristic of all encumbrances is that a person other than the owner has some right or interest in the property. However, an encumbrance in and of itself does not create an estate in the property. An encumbrance can involve money, but not always. Any Claim, lien, charge or liability attached to and binding on real property is an encumbrance.

quitclaim deed,

is a special type of deed used to release all right, title and interest, if any, of the deed grantor in the property. it is one of the methods used to remove a cloud on title

quiet title court action

is an action asking the court to establish clear title by removing any cloud that is affecting title.

the person who has the benefit of a lien

is the lienor or lienholder.

easement

is the right to enter and use land belonging to another owner. The right is not possessory and does not create an estate, and the property owner is not dispossessed from his land; rather he coexists side-by-side with the holder of the easement. The easement can be an: Easement appurtenant; or Easement in gross.

What is the purpose of restrictive covenants?

is to protect and maximize property values and to preserve the quality of the neighborhood and pertain to the homeowners within that subdivision

Does an encumbrance involve money?

it can involve money but it doesn't always.

A cloud on title can originate in a number of ways:

judgment; errors or defects in prior legal documents relating to the property; fraud or misrepresentation; or errors in chain of title recordings.

Execution - As used in liens

means to sell the property pledged as collateral for the debt.

appurtenant.

privilidge

execution sale

sheriffs sale. At the execution sale, the winning bidder receives a sheriff's certificate, also known as a certificate of sale, that entitles the bidder to a sheriff's deed within 180 days from the date of the execution sale. The mortgagor, by statute, has 180 days to try to redeem the property. This 180 day period is known as a statutory right of redemption, which allows the borrower to redeem the property for cash from the successful bidder. If the borrower redeems the property, the high bidder's right to the sheriff's deed is extinguished.

certificate of sale

sometimes referred to as a sheriff's certificate. The certificate of sale entitles the high bidder to a sheriff's deed at the end of 180 days after the date of the sheriff's sale. During this 180-day period, the judgment debtor has a 180-day statutory right of redemption. The federal government, if a junior lien holder, has a 120-day right of redemption. All other junior lien holders have a 60-day right of redemption. If any junior lien holder or the judgment debtor redeems the property during the permissible redemption period, that person must pay the high bidder in cash the amount of the high bid, plus interest, and all costs.

Involuntary liens are also known as

statutory liens since there is a statute that specifically authorizes liens of this classification to be placed against a property without the consent of the owner.

which tenancies are not encumbrances?

tenancy at will and tenancy at suffrage because they can both end at any time

Hypothecation

the act of pledging something as collateral for a debt.

What happensin the event the borrower defaults with a Trust deed?

the beneficiary can immediately instruct the trustee to exercise the power of sale. The power of sale is done through a non-judicial process known as foreclosure by trustee's sale. Since this procedure does not involve a court process, it is known as a non-judicial foreclosure. Specific statutory steps and procedures must be followed by the trustee to carry out the trustee sale

mortgagor is

the borrower

lien theory states

the borrower retains both legal and equitable title. The mortgage serves as a LIEN against the property. In the case of default, the lender will be required to institute a foreclosure proceeding in order to obtain legal title to the property.

what if a judgment creditor desires a general judgment lien on the properties of a judgment debtor located in other counties?

the judgment can be transcribed into the county records of other counties. Once transcribed, the judgment becomes a general lien on all of the property the judgment creditor own in those counties.

What is the process once a judgment has been ordered by a judge?

the judgment is recorded in the county in which the case was brought. Once recorded, a judgment becomes a general lien against all property owned by the judgment debtor in that county.

mortgagee is

the lender

beneficiary in title negotiations

the lender in a trust

Upon payment in full in a land sales contract

the seller will deed the property to the buyer, thereby conveying full title. The buyer, during the period of the land sales contract, is given all the rights and responsibilities of ownership, but has only equitable title, while the seller remains vested in legal title, also known as naked title. With a land sales contract, the seller retains title to the property until the buyer pays the total amount of the agreed payments.

title theory states.

transferring of title to the lender until the mortgage loan is paid off

Where can an agent find a copy of the CCR's (covenants, conditions, & restrictions)?

when a subdivision is created, the full text of the restrictive covenants is filed and recorded in the county public records. When the document is recorded, it is given a recording number by which it can be referenced in the future. Whenever a lot is sold in the subdivision, all that is required in the deed is a reference to the recording number of the covenant. This number is enough information for a title company to supply the new buyer with a complete copy of the restrictive covenants(CCR's).

One of the most common situations in which the subordination of liens is found is

when an encumbered land, such as that of a subdivider, is divided and a lot is sold to a buyer who finances the purchase. The buyer's lender will usually only pay the subdivider for the lot once a structure has been built on it. The buyer, in order to build the structure, needs a construction loan. Construction lenders require a first lien position. The subdivider, who is currently in first lien position, releases (subordinates) his position and becomes junior to the construction lender. The construction lender now has first lien position, and the subdivider has second lien position.