Bulletin: OR000015

Date:
December 24, 1991
To:
All Oregon Agents
RE:
Purchaser's Assignment for Security

Dear Associates:

The Oregon Court of Appeals has ruled that an "Assignment for Security Purposes" of a purchaser's interest in a land sale contract survives a deed given in fulfillment of the contract and becomes a lien on the fee title. Crane v. Mitchell, 106 Or. App. 52, 806 P.2d 698 (1991).

In this case a purchaser of a land sale contract secured indebtedness to a third party with a recorded Assignment for Security Purposes. The contract was later paid off with the proceeds of a DVA loan with a deed recorded to the purchaser and a mortgage to DVA. The DVA took the position that the Assignment became unenforceable when the contract was fulfilled.

The Court of Appeals disagreed and decided that the Assignment attached not only to the contract but also to the purchaser's interest in the land. That interest had now become fee title.

The moral here is to not eliminate security assignments by purchasers or real estate contracts when those contracts are fulfilled. Conversely, you should not eliminate security assignments by sellers when their contracts are extinguished through foreclosures or deed in lieu.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
3.52 Contracts For Sale
 
12.28 Mortgages
Exceptions Manual:
OR Contracts for Sale
 
OR Mortgages
Forms:
None