Voluntary Liens and Foreclosures 17 Flashcards
1
Q
Failure to Comply with Any Terms of the Note or Mortgage
A
Default -
Failure to Comply with Any Terms of the Note or Mortgage
Chap 17
2
Q
A Pledge of Real Property as Security Without Giving Possession of Property to Lender.
A
Hypothecation -
A Pledge of Real Property as Security Without Giving Possession of Property to Lender.
Note: Promissory Note (Chap 6) - Personal Promise to repay a debt. Serves as evidence of debt, but does not reference collateral.
Chap 17
3
Q
Secures Note with Collateral (Property), Document is called?
- Promissory Note - Promise to Repay Debt (Amount, Rate, Pattern of Pymts - No Collateral Referenced)
- M_____or - Borrower / M_____gee - Lender
- S______ Of Mo______ - Pay-Off
Remember OR Gives and EE receives
A
Mortgages - Secured Note With Collateral (Property)
- Promissory Note - Promise to Repay Debt (Amount, Rate, Pattern of Pymts - No Collateral Referenced)
- Mortgagor - Borrower / Mortgagee - Lender
- Satisfaction Of Mortgage - Pay-Off
Remember OR Gives and EE receives - Mortgagor gives money to Mortgagee.
Chap 17
4
Q
Mortgage Default Steps (Judicial Foreclosure)
- E___ of R______ - Borrower holds
- L__ P______ (Lawsuit) - Recorded
- C____ Ac___ - Takes Place
- S____’s S_____ - Highest Bidder Received S____’s C____ of Sale
- Stat____ Ri___ of Redem____ - For __ months begins
- If N_ R______ - S_____’s Deed Issued to Bidder
A
Mortgage Default Steps (Judicial Foreclosure)
- Equity of Redemption - Borrower holds
- Lis Pendens (Lawsuit) - recorded
- Court Action - takes place
- Sheriff’s Sale - Highest Bidder received Sheriff’s Certificate of Sale
- Statutory Right of Redemption - For 6 mos begins
- No Redemption - Sheriff’s Deed Issued to Bidder
Chap 17
5
Q
Promise to Repay Debt - with Amount, Rate, Pattern of Payments Noted - and (No Collateral Referenced) is called?
- Mortgage - Secures note with Collateral/Property
- Mortgagor - Borrower / Mortgagee - Lender
A
Promissory Note - Promise to Repay Debt - with Amount, Rate, Pattern of Payments Noted - and (No Collateral Referenced)
- Mortgage - Secures Note with Collateral/Property
- Mortgagor - Borrower / Mortgagee - Lender
Chap 17
6
Q
Payoff of Mortgage - Lender Delivers in 30 days to Borrower This document is called?
A
Defeasance (Payoff) or Satisfaction of Mortgage -
Lender Delivers in 30 days to Borrower as Proof of Payment in Full.
Chap 17
7
Q
Lawsuit Filed, and Recorded and the Debt is Accelerated. This Document States that Litigation is Pending Against the Property Owners. Used in Mortgage Process.
A
Lis Pendens -
Lawsuit Filed, and Recorded and the Debt is Accelerated. This Document States that Litigation is Pending Against the Property Owners. Used in Mortgage Process.
Chap 17
8
Q
In Mortgage Defaults -
How Does Borrower Hold Title before the Sheriff’s Sale
A
In Mortgage Defaults -
Equity of Redemption - Borrower Holds this Title before the Sheriff’s Sale
Chap 17
9
Q
In a Mortgage Default, When does Sheriff’s Sale Take Place?
A
Mortgage Default
Sheriff’s Sale - takes place After Lis Penden’s Filed, and Court Action Takes Place.
Then Sheriff’s Sale is Conducted, then Statutory Right of Redemption starts (6 Mos).
Chap 17
10
Q
Mortgage in Default Process -
- L_ P______ - Lawsuit Filed and Recorded. The Debt is Accelerated. L__ P_____ States Litigation is Pending Against Property Owners.
- C____ Ac____ - Takes Place
- Sh___ S____ - Highest Bidder Gets S______ Cert_____ of S___
- Stat_____ R____ of Red_____ - ___ Months Given to Owner
- S_____’s D____ - If no Redemption - Sherrif’s Certificate of Sale Holder Gets Full Title.
A
Mortgage in Default Process -
- Lis Pendens - Lawsuit Filed and Recorded. The Debt is Accelerated. Lis Pendens States Litigation is Pending Against Property Owners..
- Court Action - Takes Place
- Sheriff’s Sale - Highest Bidder gets Sheriffs Certicate of Sale
- Statutory Right of Redemption - 6 Months Given to Owner
- Sheriff’s Deed - If no Redemption - Sherrif’s Certificate of Sale Holder Gets Full Title.
Chap 17
11
Q
Mortgage Defaults -
At the Sheriff’s Sale what does the Highest Bidder receive and what happens next?
A
Mortgage Defaults -
Sheriff’s Certificate of Sale -
At Sheriff’s Sale the Highest Bidder receives“Sheriff’s Cert of Sale.” Next, Statutory Right of Redemption - follows for 6 months.
Note to Self: Mortgages - 6 mos to reinstate after sale / Trust Deeds - 90 days to reinstatte.before sale
Chap 17
12
Q
In Mortgage Default
After the Sheriff’s Certificate of Sale is Given to Highest Bidder.What happens next?
A
Statutory Right of Redemption (Mortgages Defaults) -
The Owner is Given (6 months) to Reinstate. After Sheriff’s Sale Certificate of Sale (Given to Highest Bidder).
Chap 17
13
Q
Mortgage Sheriff’s Sale - Biddng
- Ex___ M___ Bid - Excess funds belong to borrower (minus foreclosure cost)
- N_ B___ - Lender bids and receives C_____ of S_____
- Insu_______ M____ B___ – Deficiency Judgment is obtained by lender when sale brings less than amt owed.
A
Mortgage Sheriff’s Sale - Bidding
- Excess Money Bid - Excess funds belong to borrower (minus foreclosure cost)
- No Bids - Lender bids and receives Certificate of Sale
- Insufficient Money Bid – Deficiency Judgment is obtained by the lender when sale brings less than amt owed.
Remember: Arizona law prohibits (Deficiency Judgment) on 2.5 acres or less or used as sfr)
Chap 17
14
Q
Trust Deed Documents -
- Promissory Note - Promise to R____ Debt (Amount, Rate, Pattern of Payments - No Collateral Reference)
- Trust Deed - Secures Note with C______/P______
- Trustor/Borrower; Beneficiary/Lender; Trustee/3rd Party with power to sell
- Trustee Acts by Ben______ Instructions, and Only when Trust Deed is Paid-Off or in Default.
- Defeasance (Pay-off) - D_____ of Rec______ Releases you from Deed of Trust; Beneficiary/Lender instructs Trustee to send - In 30 days of payoff.
A
Trust Deed Documents -
- Promissory Note - Promise to Repay Debt (Amount, Rate, Pattern of Payments - No Collateral Reference)
- Trust Deed - Secures Note with Collateral/Property
- Trustor/Borrower; Beneficiary/Lender; Trustee/3rd Party with power to sell
- Trustee acts by Beneficiary instructions, and only when Trust Deed is paid-off or in default.
- Defeasance (Pay-off) - Deed of Reconveyance releases you from Deed of Trust; Beneficiary lender instructs Trustee to send - 30 days of payoff.
Chap 17
15
Q
Non-Judicial (Trustee’s Power of Sale)
- Tr___ Instructed to S___ - Per Benificiary-Lender
- Not__ of Def___ and Tru__ S___ - Recorded by Trustee (County Recorder Office)
- N___ to Tr___/Borrower: Trustee sends “Notice of Default and Trustee Sale” to Tr____ and Anyone Who Recorded “Request for Notice of Default.
- R____ of Rein________ - Trustor/Borrower May Cure Default by Paying Back Balance Due and (Cost/Penalties) at Anytime Before Sale in (___ Days)
- Tr_____ Sale held - After 90 days Right of Reinstatement Period. Sale held and T____ Deed - to Highest Bidder.
- Tr____ D_____ - Given to Highest Bidder.
Def_____ J_______ prohibited - 2 1/2 acres or less (SFR/2Units)-
A
Trust Deed in Default (Non Judicial Foreclosure)
Non-Judicial (Trustee’s Power of Sale)
- Trustee Instructed to Sell - Per Benificiary-Lender
- Notice of Default and Trustee Sale - Recorded by Trustee (County Recorder Office)
- Notice to Trustor/Borrower**: Trustee sends “Notice of Default and Trustee Sale” **to Trustor and Anyone who Recorded “Request for Notice of Default.
- Right of Reinstatement - Trustor/Borrower May Cure Default by Payng Back Balance Due and (Cost/Penalties) at Anytime Before Sale in (90 Days)
- Trustee Sale held - After 90 days Right of Reinstatement Period. Sale held and Trustee Deed - to Highest Bidder.
- Trustee Deed - Given to Highest Bidder
Deficiency Judgement prohibited - 2 1/2 acres or less (SFR/2Units)
Chap 17
16
Q
Agreement for Sale is also know as?
1) Contract for S___ of R___ Es___\_; 2) L___ Con____; 3) C_____ for D___\_; 4) V_____’s L____
Entails the following:
1) A Contract for Sale of Property and Financing Instrument - All In One. 2) Deed is Not Delivered at Closing as With a Mortgage/Trust Deed. 3) At Closing Buyer Should “Record” Contract to Show “Equitable Title.” 4) Seller usually Delivers Deed to Buyer After Final Payment.
A
Agreement for Sale also known as:
1) Contract for Sale of Real Estate; 2) Land Contract; 3) Contract for Deed; 4) Vendor’s Lien
This type of contract entails the following:
1) A Contract for Sale of Property and Financing Instrument - All In One. 2) Deed is Not Delivered at Closing as With a Mortgage/Trust Deed. 3) At Closing Buyer Should “Record” Contract to Show “Equitable Title.” 4) Seller usually Delivers Deed to Buyer After Final Payment.
Chap 17
17
Q
What is 1st step in Trustee’s Power of Sale?
A
Trustee’s Power of Sale - 1st Step
- Trustee Instructed to Sell - Beneficiary-Lender instructs trustee (3rd party) to sell. (Step 1)
Chap 17
18
Q
What does the Trustee do After Instructed to Proceed with Trustee’s Sale?
N___ of D____ and Tr____ Sale is Re______
A
Trutee’s Power of Sale (Step 2)
Notice of Default and Trustee Sale -
Is Recorded by Trustee with County Recorder Office (Step #2)
Chap 17
19
Q
In a Trustee Sale - what is done with Notice of Default and Trustee Sale document?
A
Trustee’s Power of Sale - (Step 3)
Notice to Trustor/Borrower:
Trustee Records then Sends - Notice of Default/Default Trustee Sale to trustor and anyone who has recorded “Request for Notice of Default. (step 3)
Chap 17
20
Q
In a Trustee’s Sale process, What Do Owners have Before the Sale and for What Time Frame?
A
Trustee’s Power of Sale - (Step 4)
Right of Reinstatement (90 Days) - Given to Trustor/Borrower, Who May Cure Default by Paying Balance Due plus (Cost/Penalties) at Anytime Before Sale in 90 days (step 4).
After Notice of Default & Trustee Sale sent out….
Chap 17
21
Q
In a Trustee Sale process, what happens after 90 days of Right of Reinstatement period?
A
Trustee’s Power of Sale - (Step 5)
- Trustee Sale held - After 90 Days Right of Reinstatement Period, Trustee Deed - Given to Highest Bidder. (Step 5)
Deficiency Judgement prohibited - 2 1/2 acres or less (SFR/2Units)
Chap 17
22
Q
In the Trustee Sale process, What is Given to Highest Bidder at the Trutee’s Sale (at the Final Step of Process)?
A
Trustee’s Power of Sale - (Step 6)
- Trustee Deed - given to Highest Bidder after 90 days Redemption Period at Trustee’s Sale (step 6)
Deficiency Judgement prohibited - 2 1/2 acres or less (SFR/2Units)
Chap 17
23
Q
Agmt for S___ aka C___ for S___ of R__ Es___, aka L___ C____, C____ for D___, and V_____ Lien
- Agreement used as S___ Fin______ (contract/financing all in one)
- Vend__/Seller and Vend__/Buyer
- At Closing: Buyer records contract to show ownership with no deed (Eq___ Ownership)
Remember Or Gives and EE receives
A
Agreement for Sale (Contract for Sale of Real Estate, Land Contract, Contract for Deed, and Vendor’s Lien)
- Agreement used as Seller Financing (contract financing all in one)
- Vendor/Seller and Vendee/Buyer
- At Closing: Buyer records contract to show ownership with no deed (Equitable Ownership)
Remember Or Gives and EE receives - Vendor gives financing to Vendee (Buyer)
Chap 17
24
Q
A Sheriff’s Sale is held for what Type of Foreclosure?
A
Mortgages (Judicial Foreclosure) -
A Sheriff’s Sale is held for Mortgages, After Court Action. “Sheriff’s Certicated of Sale” Given to Highest Bidder. Then, Statutory Right of Redemption is Held for 6 Months by Mortgagor(Borrower).
Chap 17
25
What is **Given to Highest Bidder in Sheriff's Sale**
**_Sheriff's Certificate of Sale_** - is **Given to Highest Bidder.**
_Statutory Right of Reemption_- **Begins for 6 months After Sheriff's Certificate of Sale issued at Sheriff's Sale.** Then **Sheriff's Deed** conveys full title.
**Chap 17**
26
**After a Mortgage is Paid-Off**, What is Issued in **30 Days by Lender?**
**Satisfaction of Mortgage (Defesance/Pay-off)** -
For Mortgages: **Lender Delivers in 30 Days of Pay-Off to Borrower.**
**Chap 17**
27
**Mortgages** have a **Judicial or Non-Judicial** Foreclosure?
**Mortgages** have **Judicial Foreclosure** -
1. **_Equity of Redemtion_ -** Held by Borrower
2. **_Lawsuit (Lis Pendens)_** - **Recorded** States Pending Litigation.
3. **_Court Action_** - Approval
4. **Sheriff's Sale** - Sheriff's Cert of Sale (Highest Bidder),
5. **_Statutory Redemption (6 mos)_** - for Borrower
6. **_Sheriff's Deed_** - Not Redeemed Given to Holder of Sheriff's Cert of Sale.
**Chap 17**
28
In Trust Deeds, who are the **_Trustor**_, _**Beneficiary_**, and **_Trustee_**.
**Trust Deeds (Parties) -**
1. **Trustor/Borrower**
2. **Beneficiary/Lender**
3. **Trustee/3rd Party**
**Chap 17**
29
**Trust Deed** - For Defeasance (Pay-off) What Document Used For This Type of Pay-Off to be Sent to Trustor?
**_Deed of Reconveyance_ -**
**Beneficiary(Lender) Instructs Trustee** to Process **In 30 Days of Payoff to Trustor (Borrower).**
**Chap 17**
30
Is a **Trust Deed** Foreclosure **Judicial or Non-Judicial?**
**Trust Deed Foreclosure - (Non-Judicial)** both options avail.
1. **_Lender Instructs_** - Trustee to Sell.
2. **_Trustee Records_** - Notice of Default and Trustee Sale
3. **_Trustee Sends Notice_** to Borrower/2nd Lien Holder
4. **_Right of Reinstatement_** - Owner Bring Current Plus Cost/Penalties **(90 Days - From Recording Notice of Default)**
5. **_Trustee Sale_** - **Trustee's Deed** delivered
**_Deficiency Judgements_** - **prohibited** (SFR/2 Units) **or 2 1/2 acres or less.**
**Chap 17**
31
**What other Type of Sale Uses** **Judicial Proceedings as an Option and Forfeitures.**
**Land Contract Default Process**: (Agreement of Sale, Contract for Sale of Real Estate, Land Contract, Contract for Deed, Vendor's Lien)
**_Option #2 - Forfeiture Action_**
1. **_Reinstate (Grace Period)_** - **30 days to 9 mos.**
2. **_Depending on Purchase Price Already Paid_**. -
* **1- 19% Paid**- **30 days** - single
* **20%- 29% Paid** (9pts) - **60 days** - double
* **30%- 49% Paid** - (9pts) **120 days** - double
* **50%- More** **Paid** - (50pts) **9 mos** - baby born
3. **_Complete Forfeiture Action_ After Grace Period Expires** - **(Bankruptcy's Stop)**
**_Option #1 - Judicial Forclosure - Accelertion Clause_ -** exercised foreclose as mortgage.
1. **_Equity of Redmption_** - Borrower holds
2. **_Lawsuit (Lis Pendens)_** - recorded
3. **_Court Action_** - takes place
4. **_Sheriff's Sale_** - Highest Bid (Sheriff's Certificate of Sale)
5. **_Statutory Right of Redemption_** - 6 mos begins
6. **_No Redemption Done_** - Sheriff's Deed issued
**Chap 17**
32
These **two theories** relate to what?
1. **\_\_\_\_ Theory** -States the **Mortgage/Trust Deed** **_DOES NOT_ Convey Any** **Ownership to Lender**.
2. **\_\_\_\_ Theory** - States **Legal Title** **is Conveyed to Lender.**
3. **Arizona Uses What Theory?**
**Lien vs Title Theory**
1. **Lien Theory** - States the **Mortgage/Trust Deed** **_DOES NOT_ Convey** **Any Ownership to Lender**.
2. **Title Theory** - **States** **Legal Title** **is Conveyed to Lender.**
3. **Arizona uses "Lien Theory."**
**Chap 17**
33
**A Legal Document Obtained** **by a Lender When a Foreclosure Sale Brings Less Than the Amount Owed**.
1. **2 1/2 Acres or less** - (SFR/2Units) **prohibit this document from being filed**
2. **_Married Couple_** - **(Quit Claim Deed) _Does Not_** Relieve Spouse From Liability of this Judgment.
**Deficiency Judgment -**
**A Legal Document Obtained** **by a Lender When a Foreclosure Sale Brings Less Than the Amount Owed**.
1. **2 1/2 Acres or less** - (SFR/2Units) **prohibits Deficiency Judgment from being filed**
2. **_Married Couple_** - **(Quit Claim Deed) _Does Not_** Relieve Spouse From Liability of Deficiency Judgment.
**Chap 17**
34
**Bankruptcies Effect Foreclosures or Forfeitures in What Way?**
**Bankruptcies -**
**Stop Foreclosures or Forfeiture Process**
**Chap 17**
35
**Property Given to Lender in _Return for Cancellation of Debt_** (Subject to Superior and Subordinate Liens).
**Deed in Lieu of Forclosure -**
**Property Given to Lender in _Return for Cancellation of Debt_** (Subject to Superior and Subordinate Liens).
**Chap 17**
36
**Foreclosure with Multiple Liens**
1. **Foreclosure of Sup\_\_\_\_\_ (Prior) Lien** - May Cancel Subordinate Lien's Interest
2. **Sub\_\_\_\_ (junior) Lien** - **Has** **Right To Cure Superior Lien** and **Foreclose on Jr Lien.**
3. **If Sub\_\_\_\_\_ (junior) Lien Foreclosed** - **Property Delivered to Highest Bidder** **Subject to Any Higher Liens.**
**Foreclosure with Multiple Liens** -
1. **_Foreclosure of Superior (Prior) Lien_** - May Cancel Subordinate Lien's Interest
2. **_Subordinate (junior) Lien_** - **Has** **Right To Cure Superior Lien** and **Foreclose on Jr Lien.**
3. **_If Subordinate (junior) Lien foreclosed_** - **Property Delivered to Highest Bidder** **Subject to Any Higher Jiens.**
**Chap 17**
37
**Sale** which the **Loan Balance is Higher Than the Property Value.** **Lender Agrees to Accept Reduced (Short) Pay-Off.**
**Short Sale -**
**Sale** which the **Loan Balance is Higher Than the Property Value.** **Lender Agrees to Accept Reduced (Short) Pay-Off.**
**Chap 17**
38
A Sale in Which the **Lender has Acquired the Property thru Auction or (Trustee Sale)**
**Bank Owned Property (REO - Real Estate Owned) -**
A Sale in Which the **Lender has Acquired the Property thru Auction or (Trustee Sale)**
**Chap 17**
39
**An Arrangement Between a Borrower and Lender** in Which the **Lender Agrees to _Delay_ Foreclosure.**
**Forbearance** **(Delay) -**
**An Arrangement Between a Borrower and Lender** in Which the **Lender Agrees to _Delay_ Foreclosure.**
**HOLDING BACK.....THE PROCESS**
**Chap 17**
40
**An Agreement** Between a Borrower and Lender **Changing Loan Terms**.
**Loan Modification -**
**An Agreement** Between a Borrower and Lender **Changing Loan Terms**.
**Chap 17**
41
**Fix and Flips**
1. **Owner Oc\_\_\_\_\_ (Not Sold/Leased)** - Licensed Contractors - **NOT Required to Perform All Improvements**
2. **_Licensed Contractors - Work Required_** -
* **Property Offered for** **Sale/Lease**, or
* **Sold/Leased within 1 YR** **of Completion or Upon Certificate of Occupancy Issued.**
* **Price is $1000 or more**.
1. **_No Permit_** - **Gov Agency May Require a Permit**
* **Owner to Obtain Permit Retroactively**
* **Structure May be Demolished**
**Fix and Flips**
1. **_Owner Occupied (Not Sold/Leased)_** - Licensed Contractors - **NOT Required to Perform All Improvements**
2. **_Licensed Contractors - Work Required_** -
* **Property Offered for** **Sale/Lease**, or
* **Sold/Leased within 1 YR** **of Completion or Upon Certificate of Occupancy Issued.**
* **Price is $1000 or more**.
1. **_No Permit_** - **Gov Agency May Require a Permit**
* **Owner to Obtain Permit Retroactively**
* **Structure May be Demolished**
**Chap 17**
42
**A Claim Against Property** to Secure a Debt; **Money Encumbrance.**
**Lien -**
**A Claim Against Property** to Secure a Debt; **Money Encumbrance.**
**Chap 18**
43
States the Litigation is Pending Against the Property Owners.
**Lis Pendens -**
States the Litigation is Pending Against the Property Owners.
**Chap 17**
44
In a Mortgage Default **when does Court Action take place?**
Mortgage Default -
**Court Action** - takes place **after Lis Pendens filed** and before the Sheriff's Sale.
**6 Steps:**
1. **Lis Pendens**
2. **Court Action**
3. **Sheriff's Sale - Sherrif's Cert of Sale (highest bidder)**
4. **Redemption Period (6 Mos)**
5. **Sheriffs Deed - Title Conveyed.**
**Chap 17**
45
In a Mortgage Default Process...
## Footnote
**After Sheriff's Sale held and Sheriff's Certificate is issued and 6 Mos Statutory Right of Redemption has passed, What is Given to Convey Full Title?**
**Sheriff's Deed -**
**_Given to Convey Full Title_, after Sheriff's Sale held and Sheriff's Certificate is issued** and after **6 mos Statutory Right of Redemption has passed**.
**Chap 17**
46
**E\_\_\_\_\_\_ Of R\_\_\_\_\_\_\_**
**What Does Borrower Have, Prior to Sheriff's Sale in a Mortgage Default?**
**Equity of Redemption -**
**Borrower Has this Status, Prior to Sheriff's Sale** i**n a Mortgage Default.**
**Chap 17**
47
A promise to repay the debt. Serves as evidence of debt, **not as collateral**?
**Promissory Note -**
A promise to repay the debt. Serves as evidence of debt, **not as collateral.**
**Chap 17**
48
**What is Another Name for Borrower in a Trust Deed.** This Person Conveys Legal Title to the 3rd Party and **Signs the Deed of Trust.**
**Trustor -**
**What is Another Name for Borrower in a Trust Deed.** This Person Conveys Legal Title to the 3rd Party and **Signs the Deed of Trust.**
**Chap 17**
49
3rd party who has power to sell the property at foreclosure, when borrower is in default. Must be instructed by lender.
**Trustee -**
**3rd party who has power to sell the property** at foreclosure, when borrower is in default. Must be **instructed by lender.**
**Chap 17**
50
**Another Name for the Lender in a a Deed of Trust.** Lender Instructs Trustee (3rd party) to Sell at a Foreclosure.
**Beneficiary -**
**Another Name for the Lender in a a Deed of Trust.** Lender Instructs Trustee (3rd party) to Sell at a Foreclosure..
**Chap 17**
51
**N\_\_\_\_ of Def\_\_\_\_ and T\_\_\_\_\_'s Sale**
When beneficiary instructs Trustee to force the sale. **This document is recorded by Trustee. This documents is then sent to trustor (Borrower) and anyone else who has recorded request** (seller and 2nd lien holder)
**Notice of Default and Trustee's Sale -**
When beneficiary instructs Trustee to force the sale. **This document is recorded by Trustee. This documents is then sent to trustor (Borrower) and anyone else who has recorded request** (seller and 2nd lien holder)
**Chap 17**
52
**Trustor (borrower) Can Cure Default** for Trust Deed, by **Paying Back What is Owed Plus Cost and Penalties** - **Within 90 Days** *_before Trustee's Sale_*. This is called?
**Right of Reinstatement (for Trust Deed Defaults)-**
**Trustor (borrower) Can Cure Default** for Trust Deed, by **Paying Back What is Owed Plus Cost and Penalties** - **Within 90 Days** *_before Trustee's Sale_*.
**Chap 17**
53
Trust Deed in Default -
**After the "Right of Redemption (90 days)** has taken place. What happens next?
**Trustee Sale -**
**Sale is held** after **the "Right of Redemption (90 days)** has taken place. Then, ***"Trustee's Deed"*** delivered to highest bidder to convey title.
**Chap 17**
54
This Document conveys Title to Highest Bidder after Trustees Sale.
**Trustee's Deed -**
This Document conveys Title to Highest Bidder after Trustees Sale..
**Chap 17**
55
With a Trust Deed, the **document used as a Defeasance (Pay-off)** for balance paid in full and received from Trustor is called?
**_Deed of Reconveyance_ -**
Beneficiary (lender) instructs Trustee to process **in 30 days of payoff to Trustor (Borrower).**
**Chap 17**
56
Land Contract in default. **Seller must give buyer grace period** to reinstate **(30dys - 9 mos), depending on percent of purchase price paid.** Then may complete **F\_\_\_ A\_\_\_\_.**
**Forfeiture Action -**
Land Contract in default. **Seller must give buyer grace period** to reinstate **(30dys - 9 mos), depending on percent of purchase price paid. Then may complete Forfeiture Action.**
**Chap 17**
57
**L\_\_\_ C\_\_\_\_\_ Default Process**: (Agmt of S\_\_\_\_, C\_\_\_ for S\_\_\_ of R\_\_ E\_\_\_, aka L\_\_\_ C\_\_\_\_, aka C\_\_\_ for D\_\_\_\_, V\_\_\_\_'s L\_\_\_)
**_Option #2 - Forfeiture Action_**
1. **_Reinstate (Grace Period)_ - 30 days to 9 mos.** Depending on Purchase Price already paid.
* **1**-**19%** (19pts) - **30 days - single**
* **20%-29%** (9pts) - **60 days - double**
* **30%**-**49%** (9pts) - **120 days - double**
* **50%**-**more** (50pts)- **9 mos - max**
2. **_Grace Period Expires_** - Complete Forfeiture Action
**_Option #1 - Judicial Forclosure - Accelertion Clause -_** exercised foreclose as mortgage.
1. **_Equity of Redemption_** - Held by Borrower
2. **_Lawsuit (Lis Pendens)_** - recorded
3. **_Court Action_** - takes place
4. **_Sheriff's Sale_** - Highest Bid (Sheriff's Certificate of Sale)
5. **_Statutory Right of Redemption_** - 6 mos begins
6. **_No Redemption_** - Sheriff's Deed issued
**_Land Contract Default Process (2 options)_**: (Agreement of Sale aka Contract for Sale of Real Estate, aka Land Contract, aka Contract for Deed, aka Vendor's Lien)
**_Option #2 - Forfeiture Action (Opt 1 Jud Foreclose)_**
1. **_Reinstate (Grace Period)_ - 30 days to 9 mos.** Depending on Purchase Price already paid.
* **1-19%** (19pts) - **30 days - single**
* **20%-29%** (9pts) - **60 days - double**
* **30%-49%** (9pts) - **120 days - double**
* **50%-more** (50pts)- **9 mos - max**
2. **_Grace Period Expires_** - Complete Forfeiture Action
**_Option #1 - Judicial Forclosure - Accelertion Clause -_** exercised foreclose as mortgage.
1. **_Equity of Redemption_** - Held by Borrower
2. **_Lawsuit (Lis Pendens)_** - recorded
3. **_Court Action_** - takes place
4. **_Sheriff's Sale_** - Highest Bid (Sheriff's Certificate of Sale)
5. **_Statutory Right of Redemption_** - 6 mos begins
6. **_No Redemption_** - Sheriff's Deed issued
**Chap 17**
58
States that the **Mortgage/Trust Deed _DOES NOT_ Convey Any Ownership to Lender** **(Used in Arizona).**
**Lien Theory -**
States that the **Mortgage/Trust Deed _DOES NOT_ Convey Any Ownership to Lender** **(Used in Arizona).**
**Chap 17**
59
States Legal Title is Conveyed to Lender. (not in AZ)
**Title Theory -**
States Legal Title is Conveyed to Lender. (not in AZ)
**Chap 17**
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**In a Trust Deed** **Defeasance (Pay-off), What Document is Used** **for Pay-Offs and Sent to Trustor?**
**_Deed of Reconveyance (Trust Deed Pay-Off)_ -**
Beneficiary (Lender) Instructs Trustee to **Send Trust Deed Pay-Off in 30 days to Trustor (Borrower).**
**Chap 17**
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**In Trust Deed - Defeasance (Pay-off), What Document** is Sent to Trustor for Pay-Offs?
**_Deed of Reconveyance (Trust Deed Pay-Off)_ -**
Beneficiary (Lender) Instructs Trustee to **Send in 30 Days of Payoff to Trustor (Borrower).**
**Chap 17**
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**Lien Placed** **on Property** **with Owner's Consent are called?**
**_Three (3) Liens Examples_**
1. **Mortgagees, Trust Deeds, and Agreements of Sale.**
2. **All Three Hypothecate Real Estate as Security for Debt.**
**Voluntary Liens** -
**Lien Placed on Property** **with Owner's Consent.**
_**Three (3)** **Liens Examples**_
1. **Mortgagees, Trust Deeds, and Agreements of Sale.**
2. **All Three Hypothecate Real Estate as Security for Debt**..
**Chap 17**
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**_Non-Judicial (Trustee's Power of Sale)_**
1. **Tr\_\_\_ Instructed to S\_\_\_ - Per Benificiary-Lender**
2. **Not\_\_ of Def\_\_\_ and Tru\_\_ S\_\_\_** - **Recorded by Trustee (County Recorder Office)**
3. **N\_\_\_ to Tr\_\_\_(Borrower):** **_Trustee sends_** Notice of Default/Default Trustee Sale **to Tr\_\_\_\_ and anyone who recorded "Request for Notice of Default.**
4. **R\_\_\_\_ of Rein\_\_\_\_\_\_\_\_** - **Trustor/Borrower May Cure Default Pay Balance Due and Cost/Penalties at Anytime Before Sale** **(\_\_\_ days)**
5. **Tr\_\_\_\_\_ Sale held** - Deed to Highest Bidder
6. **Tr\_\_\_\_ Deed -** Title to Highest Bidder.
**Def\_\_\_\_\_ J\_\_\_\_\_\_\_ prohibited** - 2 1/2 acres or less (SFR/2Units)-
**Trust Deed in Default (Non Judicial Foreclosure)**
**_Non-Judicial (Trustee's Power of Sale)_**
1. **_Trustee Instructed_** **_to Sell_ - Per Benificiary-Lender**
2. **_Notice of Default and Trustee Sale_** - **Recorded** by Trustee (County Recorder Office)
3. **_Notice to Trustor/Borrower**_: _**Trustee sends**_ Notice of Default/Default Trustee Sale _**to Trustor and Anyone who Recorded "Request for Notice of Default._**
4. **_Right of Reinstatement_** - **Trustor/Borrower May Cure Default Pay Balance Due and Cost/Penalties** at **Anytime Before Sale** **(90 days)**
5. **_Trustee Sale held_** - Deed to Highest Bidder.
6. **Tr\_\_\_\_ Deed -** Title to Highest Bidder.
**Def\_\_\_\_\_ J\_\_\_\_\_\_\_ prohibited** - 2 1/2 acres or less (SFR/2Units)-
**Chap 17**
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**_Land Contract Default Process (2 options)_**: (Agmt of S\_\_\_, **aka** C\_\_\_\_ for S\_\_\_ of R\_\_ E\_\_\_\_, **aka** L\_\_\_ C\_\_\_, **aka** C\_\_\_\_ for D\_\_\_, **aka** V\_\_\_\_'s L\_\_)
**_Option #2 - Forfeiture Action_**
1. **_Reinstate (Grace Period)_ - 30 days to 9 mos.** Depending on Purchase Price already paid.
* **1- 19%** (20pts) - **\_\_ days - single**
* **20%-29%** (9pts) - **\_\_ days - double**
* **30%-49%** (9pts) - **\_\_\_ days - double**
* **50%-more** (50pts)- **\_\_ mos - max**
2. **_Grace Period Expires_** - Complete Forfeiture Action
**_Option #1 - Judicial Forclosure - Accelertion Clause -_** exercised foreclose as mortgage.
1. **_Equity of Redemption_** - Held by Borrower
2. **_Lawsuit (Lis Pendens)_** - recorded
3. **_Court Action_** - takes place
4. **_Sheriff's Sale_** - Highest Bid (Sheriff's Certificate of Sale)
5. **_Statutory Right of Redemption_** - 6 mos begins
6. **_No Redemption_** - Sheriff's Deed issued
**_Land Contract Default Process (2 options)_**: (Agreement of Sale, Contract for Sale of Real Estate, Land Contract, Contract for Deed, Vendor's Lien)
**_Option #2 - Forfeiture Action_**
1. **_Reinstate (Grace Period)_ - 30 days to 9 mos.** Depending on Purchase Price already paid.
* **1- 19%** (20pts) - **30 days - single**
* **20%-29%** (9pts) - **60 days - double**
* **30%-49%** (9pts) - **120 days - double**
* **50%-more** (50pts)- **9 mos - max**
2. **_Grace Period Expires_** - Complete Forfeiture Action
**_Option #1 - Judicial Forclosure - Accelertion Clause -_** exercised foreclose as mortgage.
1. **_Equity of Redemption_** - Held by Borrower
2. **_Lawsuit (Lis Pendens)_** - recorded
3. **_Court Action_** - takes place
4. **_Sheriff's Sale_** - Highest Bid (Sheriff's Certificate of Sale)
5. **_Statutory Right of Redemption_** - 6 mos begins
6. **_No Redemption_** - Sheriff's Deed issued
**Chap 17**
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**E\_\_\_\_\_\_ of R\_\_\_\_\_\_\_\_**
**What does Borrower Have, Prior to Sheriff's Sale** in a Mortgage Default?
**Equity of Redemption -**
**Borrower has this Status, Prior to Sheriff's Sale in a Mortgage Default.**
**Chap 17**
66
**_Land Contract Default Process (2 options)_**: (Agreement of Sale, Contract for Sale of Real Estate, Land Contract, Contract for Deed, Vendor's Lien)
**_Option #2 - Forfeiture Action_**
1. **_Reinstate (Grace Period)_ - 30 days to 9 mos.** Depending on Purchase Price already paid.
* **1**- 19% paid (20pts) - **\_\_\_ days - single**
2. **_Grace Period Expires_** - Complete Forfeiture Action
**_Land Contract Default Process (2 options)_**: (Agreement of Sale, Contract for Sale of Real Estate, Land Contract, Contract for Deed, Vendor's Lien)
**_Option #2 - Forfeiture Action_**
1. **_Reinstate (Grace Period)_ - 30 days to 9 mos.** Depending on Purchase Price already paid.
* **1**- **19% paid** (20pts) - **30 days - single**
2. **_Grace Period Expires_** - Complete Forfeiture Action
**Chap 17**
67
These options refer to what?
**_Option #2 - Forfeiture Action_**
1. **_Reinstate (Grace Period)_ - 30 days to 9 mos.** Depending on Purchase Price already paid.
* **20%-29%** **Paid** (9pts) - **\_\_ days - double**
2. **_Grace Period Expires_** - Complete Forfeiture Action
**_Land Contract Default Process (2 options)_**: (Agreement of Sale, Contract for Sale of Real Estate, Land Contract, Contract for Deed, Vendor's Lien)
**_Option #2 - Forfeiture Action_**
1. **_Reinstate (Grace Period)_ - 30 days to 9 mos.** Depending on Purchase Price already paid.
* **20%**-**29% Paid** (9pts) - **60 days - double**
2. **_Grace Period Expires_** - Complete Forfeiture Action
**Chap 17**
68
These options refer to what?
**_Option #2 - Forfeiture Action_**
1. **_Reinstate (Grace Period)_ - 30 days to 9 mos.** Depending on Purchase Price already paid.
* **30%-49%** **Paid** (9pts) - **\_\_\_ days - double**
2. **_Grace Period Expires_** - Complete Forfeiture Action
**_Land Contract Default Process (2 options)_**: (Agreement of Sale, Contract for Sale of Real Estate, Land Contract, Contract for Deed, Vendor's Lien)
**_Option #2 - Forfeiture Action_**
1. **_Reinstate (Grace Period)_ - 30 days to 9 mos.** Depending on Purchase Price already paid.
* **30%-49% Paid** (9pts) - **120 days - double**
2. **_Grace Period Expires_** - Complete Forfeiture Action
**Chap 17**
69
These options refer to what?
**_Option #2 - Forfeiture Action_**
1. **_Reinstate (Grace Period)_ - 30 days to 9 mos.** Depending on Purchase Price already paid.
* **50%**-more (50pts)- **\_\_\_ mos - max**
2. **_Grace Period Expires_** - Complete Forfeiture Action
**_Land Contract Default Process (2 options)_**: (Agreement of Sale, Contract for Sale of Real Estate, Land Contract, Contract for Deed, Vendor's Lien)
**_Option #2 - Forfeiture Action_**
1. **_Reinstate (Grace Period)_ - 30 days to 9 mos.** Depending on Purchase Price already paid.
* **50%**-more (50pts)- **9 mos - max**
2. **_Grace Period Expires_** - Complete Forfeiture Action
**Chap 17**
70
**What Does Borrower have, prior to Sheriff's Sale** in a **Mortgage Default?**
**Equity of Redemption -**
**Borrower Has This Status, prior to Sheriff's Sale** in **A Mortgage Default**.
**Chap 17**
71
**E\_\_\_\_\_\_ of R\_\_\_\_\_\_\_**
**What does Borrower Have, Prior to Sheriff's Sale** in a **Mortgage Default?**
**Equity of Redemption -**
**Borrower Has this Status, prior to Sheriff's Sale** in **a Mortgage Default**.
**Chap 17**
72
**Who signs Deed of Trust?**
**Trustor Signs Deed of Trust** -
**Trustor is the Borrower and Conveys Legal Title to the Trustee.****Therefore the Trustor is the only one who signs the "Deed of Trust"**.
**Chap 17**
