Bulletin: OR000014

Date:
August 27, 1990
To:
All Oregon Offices
RE:
Equitable Subrogation

Dear Associates:

The Court of Appeals has ruled that the doctrine of equitable subrogation can entitle a new mortgagee whose loan discharges a senior lien to priority over an intervening lien of record of which the mortgagee was not aware. Rusher v. Bunker, 99 Or. App 303, 782 P.2d 170 (1989).

In this case the land was encumbered of record by two liens. However, a title report to a new lender missed the second lien. The new loan was made and the proceeds were used to pay off the first lien. The new mortgagee succeeded to the priority of the first lien that it paid off. It did not matter that the second lien was recorded.

This concept of equitable subrogation depends "on the facts of the case and on the relative equities favoring the parties." It is not a mechanical rule but is something that you should be aware of.

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:
12.28 Mortgages
Exceptions Manual:
OR Mortgages
Forms:
None