Deed of Trust

News & Analysis as of

A Cautionary Tale for General Contractors

Construction lenders often go to great lengths to ensure their deeds of trust have priority over mechanic’s liens. Typically, as part of the construction loan process, general contractors are asked to sign documents...more

“First” Deeds of Trust now Second in Line?

Never a dull moment. We at Crunched Credit are probably guilty of excess and perhaps myopic focus on our federal government and its regulatory apparatus; it is such a consistently reliable source of commentary and outrage. ...more

Construction Law Alert: Appellate Court Rules General Contractors Can Contractually Subordinate Mechanics Lien Rights

In Moorefield Construction, Inc. v. Intervest-Mortgage Investment Co., 230 Cal. App. 4th 146 (4th Dist. 2014), a California appellate court upheld an agreement executed by a general contractor which subordinated its...more

Blog: HOA Liens Reign Supreme Under Nevada’s Interpretation of the Uniform Common Interest Ownership Act

Nevada is one of many states that adopted some iteration of the Uniform Common Interest Ownership Act, an act designed in part to aid homeowners’ associations (“HOAs”) in recovering delinquent fees from their members. As...more

Contractors: Beware the Subordination Clause

Did you know that California is the only state in the country in which mechanics liens are a constitutional right? Tis true. Article XIV of the California Constitution states: Mechanics, persons furnishing...more

New California Case Illustrates Peril of Full Credit Bid

In a new California case, a lender that made a full credit bid at a foreclosure sale lost its right as mortgagee under a lender’s insurance policy for damage to the property that occurred prior to foreclosure. This was so...more

Lenders Beware: the Nevada Supreme Court Holds That Foreclosures of Homeowners’ Association Liens May Extinguish First Priority...

Nevada has adopted the Uniform Common Interest Ownership Act of 1982 (the “Act”) which governs homeowners’ associations (“HOA”). One particular provision of that Act, enacted by Nevada in 1991 and later amended, and codified...more

Real Property, Financial Services & Title Insurance Update: September 2014 #1

REAL PROPERTY UPDATE - - Foreclosure/Standing: to establish a prima facie case for mortgage foreclosure, successor mortgagor must introduce evidence it was in possession of original note with blank endorsement at time...more

Improperly Indexed Mortgage: How Far Does Your Record Review Need to Go to Be Safe?

Albert v. Green Tree Servicing, LLC (In re El Erian), 512 B.R. 391 (Bankr. D. D.C. 2014) – A chapter 7 trustee sought to avoid the lien of a recorded deed of trust because (1) it contained both correct and incorrect...more

Arizona Supreme Court to Contractor: Sorry But Equitable Subrogation of a Bank’s Later Deed of Trust Trumps Earlier Mechanics’...

The smoke has finally cleared in a hard and long-fought battle between a bank and contractor both claiming priority to foreclose millions of dollars on a Phoenix condominium project. The project, well-known as Summit at...more

Merger Doctrine Does Not Prevent Deed of Trust Beneficiary From Extinguishing Junior Lien through Foreclosure, California Court...

The California Court of Appeal recently held that a foreclosure by the beneficiary under a first deed of trust extinguished a junior lien, even though the beneficiary acquired the property by way of a deed in lieu of...more

Preserving The Right To Foreclose After Accepting A Deed In Lieu

When a lender seeks to foreclose under a deed of trust, often a borrower who does not have the resources or incentive to resist the foreclosure will offer the lender a deed in lieu of foreclosure. This can be an attractive...more

Appellate Court Notes

AC35632- U.S. Bank, N.A. v. Foote - Second time is the charm. Defendant succeeded in getting plaintiff’s foreclosure action dismissed for lack of standing due to the inability of the witnesses to establish that the...more

Court Of Appeal Affirms Dismissal Of Action Against Numerous Financial Institutions Alleging Mortgage And Deed Of Trust On...

Pro Se Plaintiff Yvanova sued a number of financial institutions after her residence was nonjudicially foreclosed alleging one cause of action to quiet title to her residence in herself. Among other things, Plaintiff alleged...more

Virginia Supreme Court Allows Damages Claim for Violation of HUD Regulation Requiring Face-to-Face Meeting before Seeking...

The Virginia Supreme Court recently expanded the grounds under which a private borrower can sue a lender for violations of HUD regulations. In Squire v. Virginia Housing Development Authority, a decision issued on April 17,...more

Can an HOA "Super-Priority" Lien Extinguish a Lender's Deed?

It is hard to imagine that a lender’s first-position deed of trust on a residence worth hundreds of thousands of dollars could be extinguished by a homeowners’ association (HOA) lien for overdue neighborhood assessments,...more

Court Of Appeal Finds Lender Is Not Entitled To Recover Portion Of Developer's Future Judgment In Connection With Property Damage...

In Thoryk v. San Diego Gas & Electric Co. (2014) 225 Cal.App.4th 386, Thoryk owned a large piece of land ("Land") in San Diego County. Encumbering the Land was a first deed of trust in favor of PFI Realty ("PFI") and a...more

Supreme Court Seeks Federal Government Opinion on National Bank Act Preemption of State Foreclosure Law

Considering a petition for certiorari filed by Federal National Mortgage Association in a case concerning which state’s law governs a national bank’s authority to serve as trustee under a deed of trust—the state in which the...more

Lenders and Servicers: Be Aware of How Trustees Handle Excess Proceeds from HOA Foreclosure Sales in Nevada

Lenders and servicers have been addressing the issue of some Nevada courts ruling that a foreclosure sale by a homeowners association (HOA) "wipes out" a senior deed of trust. Since the date of our last legal alert on this...more

Washington Court of Appeals Confirms Lenders’ Right to Obtain Deficiency Judgments Against Guarantors Following Nonjudicial...

The Deed of Trust Act generally bars a lender from seeking a deficiency judgment against a borrower following nonjudicial foreclosure of a deed of trust securing the borrower's loan. The Act contains some exceptions in the...more

Recent Deed of Trust Act Cases Pose New Challenges

In 2013, Washington courts issued several decisions impacting the way banks, loan servicing companies, foreclosure trustees and other industry participants must approach claims arising out of nonjudicial foreclosure...more

California Court Rejects “Sham Guaranty” Defense; Enforces Guaranty

The “sham guaranty” defense may absolve a guarantor of liability when no deficiency is available against the borrower, and the guarantor is really the borrower with a different name. In California Bank and Trust v. Lawler...more

Why Take a Deed in Lieu of Foreclosure? Why Not?

So you're headed for receivership and foreclosure, when the borrower rep or your counsel asks, "What about a deed in lieu?" "I don't know," you think. "Getting a receiver appointed and foreclosing is what I'm most familiar...more

Arizona Court of Appeals Holds That Certain Residential Developers Are Not Protected By The Anti-Deficiency Statute After...

Nearly three years ago, in M&I Marshall & Isley Bank v. Mueller, the Arizona Court of Appeals held that the Arizona anti-deficiency statute protects a borrower who started, but never completed, construction of a single-family...more

Bank Obtains Dismissal Of Surviving Heir’s Reverse Mortgage Class Action

On January 3, the U.S. District Court for the Northern District of California dismissed with prejudice a putative class action alleging a bank breached its Home Equity Conversion Mortgage Deed of Trust and HUD regulations by...more

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