Escrow & Title
In Oregon, a mortgage or deed of trust must be recorded to:
ACreate a valid lien between the borrower and lender
BProvide constructive notice to subsequent purchasers and lenders of the lien✓ Correct
CAllow the lender to charge interest on the loan
DEnable the borrower to obtain homestead protections
Explanation
Recording a mortgage or deed of trust provides constructive notice to the world that the lien exists. Without recording, the lien is valid between the parties but can be defeated by a subsequent bona fide purchaser or lender who records without actual knowledge of the unrecorded lien.
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Key Terms to Know
Deed of Trust
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
State-Specific Concepts
Homestead Exemption
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