1. Exam Review Course Manual – Page 5 F. TRUST DEEDS AND MORTGAGES 1. General Information a. Trustor – Signs the trust deed b. Beneficiary – Loans money Consent for consolidation & new restrictions c. Right to sell – Trustor to trustee d. Terminated – Reconveyance deed

2. Exam Review Course Manual – Page 5 2. Foreclosure a. Court sale – One year redemption period Trustor possesses the property b. Trustee’s sale – 3 months before publishing Right of reinstatement Most expedient

3. Exam Review Course Manual – Page 5 c. Deed in Lieu of Foreclosure – Lender assumes junior liens d. Request for Notice Protects – Beneficiary of second loan

4. Exam Review Course Manual – Page 6 e. Lender’s Basic Protection – Borrower’s equity 3. Priority –Recorded first 4. Blanket Mortgages a. Release Clause – Releases portions of the property

5. Exam Review Course Manual – Page 6 5. Trust Deed and Mortgage Clauses a. “Assume” – Relieves seller “Subject to” – Sellers liable; buyers not liable b. Subordination Clause – Future loans have priority c. Acceleration Clause –Unpaid sum due

6. Exam Review Course Manual – Page 6 d. Open-end – Borrow additional money e. Beneficiary Statement – Gives current balance f. Prepayment Penalty – Trustor making advance payments

7. Exam Review Course Manual – Page 6 G. OTHER LIENS 1. Mechanics Liens – Verified and recorded a.Priority –Beginning of construction Earlier than recording Could impair trust deed b. Notices – Completion, cessation, non-responsibility

8. Exam Review Course Manual – Page 6 2. Lis Pendens – May affect title Lis Pendens is Effective Until – Judgment rendered or lawsuit dismissed 3. Execution – Court order to sell 4. Injunction – Court order to stop

9. End of session