Fisher Law Corporation’s Frequently Asked Questions

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What is an all-inclusive deed of trust? » What is CERCLA? » How does a condominium differ from a house? » What are Covenants that run with the land? » What is a deed in lieu of foreclosure? » What are easements? » What are Encroachments? » How does escrow work? » What is fire and flood insurance? » How do foreclosures work? » What are the different forms of doing business? » What do trade terms mean? » What are liquidated damages in real property contracts? » What is a Lis Pendens? » How do loan modifications work? »

What is a Mechanic’s Lien? » How does a Multiple Listing Service work? » What is an off-shore trust? » How do real property taxes work? » What is Procuring Cause? » What is a Quitclaim Deed? » What is RESPA? » Who bears the risk of loss during escrow? » What are second deeds of trust? » What is the Statute of Frauds? » What is Statute of Limitations on Debts Secured By a Mortgage? » Does a buyer’s broker have a duty to inspect? » What is The Parol Evidence Rule? » What is Adverse Possession? »

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Q. What is an all-inclusive deed of trust?

A. “All inclusive,” “wrap around,” “overlapping,” or “hold harmless” deed of trust. Each of these terms describes the same type of security device. They refer to an instrument which purports to secure an indebtedness owed by the trustor to the beneficiary, but the amount of the indebtedness includes a debt owed by the beneficiary on another obligation secured by the same property which is senior in priority. The overriding deed of trust can include the secured obligations of one or more senior liens, and in some cases it might also include the total debt of another senior overriding deed of trust.

The beneficiary of the overriding note who receives payments from the trustor to be applied toward payment of the underlying obligations holds the payments as a fiduciary. He has a duty to (1) make the payments on the underlying obligations from the moneys received from the trustor, and (2) disclose to the trustor material facts, including the failure to make a payment on an underlying obligation, so that the trustor can protect himself from foreclosure.

In some cases the overriding deed of trust is referred to as a “first” lien on the property. However, since there is already an existing first lien on the property for the overriding deed of trust to “wrap around,” the overriding deed of trust is by definition a second lien against the property.

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