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American College of Mortgage Attorneys — Partner with the Best®

Formed in 1974, the American College of Mortgage Attorneys (ACMA) is comprised of over 500 lawyers in North America who are experts in mortgage law.

United States

Alaska

Deed of trust. Mortgages may be used but are not favored.

SECURITY INSTRUMENT USED

Must be acknowledged by each signer before a notary but need not be witnessed. Addresses of all named parties required. Must be legible enough to be photographed and must contain legal description of property. All text must be in at least a 10-point font. The top margin of the first page must be 2”. The top margin of all succeeding pages and the side and bottom margins of all pages must be 1”. Encroachment of printed text, signatures, notary seal, footers, or any other stray marks into the margins is very likely to cause the document to be rejected by the recorder's office, or, in the alternative, an additional $50 recording fee may be assessed. The document must state the recording district in which it is to be recorded and contain the name and complete mailing address (including zip code) of the person to whom the document may be returned after recording. E-recording is now available in all recording districts. Recording fees are $20 for the first page and $5 for each additional page. Title companies may charge an additional $5 per document for e-recording, but this includes the former $2 fee for a conformed copy, so the net additional charge for e-recording is $3. Any document that amends, corrects, extends, modifies, assigns or releases a previously recorded document must reference the book and page (or serial number) of the prior recorded document(s).

RECORDING REQUIREMENTS

Typically none. AS 34.20.080 allows deed of trust to provide for a different sale location than the courthouse. When only 1 member of a married couple is to be obligated on the loan, prudent practice is to have the non-borrower spouse sign a waiver, added to the deed of trust, of any homestead or other marital rights. See also note below regarding Alaska's status as an “opt-in” community property state.

STATUTES TO BE WAIVED

Loans on 1-4-family properties may not contain a prepayment penalty unless required by federal law. AS 45.45.010(g). Note must contain a notice of the right to sue on the note without foreclosing on the property if this option is to be preserved. Alternatively, this can be in a separate document. AS 34.20.160. Lenders should include an express statement of the maturity date of the deed of trust within the deed of trust--Maturity date of a deed of trust is considered to be ten years from the date of the deed of trust unless a different period is disclosed in the deed or an extension is recorded. AS 34.20.150. Standard practice is to reference a date some period of years after the maturity date of the obligation that the deed of trust secures. Alaska does not have counties, but it has boroughs, cities, municipalities, recording districts and judicial districts and correct reference varies depending on usage. Although a deed of trust or assignment of leases may recite that the assignment of rents is immediately perfected and choate, such a clause may not be sufficient to modify the general principle of law, especially as to the rights of third parties, adopted by the Alaska Supreme Court in Bevins v. Peoples Bank & Trust Co., 671 P.2d 875, 879 (Alaska 1983) that “a rent clause in a deed of trust, which allows the beneficiary to collect rents upon default to satisfy the secured debt, does not automatically assign the rents accruing after the date of default to the beneficiary. The beneficiary must take some action to acquire possession of the property or the rents before the rent clause becomes operative.” Nevertheless, it is common for deeds of trust and assignments of leases in Alaska to recite that the assignment of rents is immediately effective, with the intention of staking out a position favorable to the beneficiary which might or might not hold up if challenged. Due to language found in AS 34.20.070, the word “conveys” should be included in the granting clause, and it is common to also reference “with power of sale” in the granting clause.

UNUSUAL TREATMENT OF STANDARD PROVISIONS

While future advance clauses are not per se invalid, dragnet clauses in real property security instruments are to be narrowly construed against the creditor. Lundgren v. National Bank of Alaska, 756 P.2d 270, 279 (Alaska 1987). As the Alaska Supreme Court stated, “the burden is upon the proponent of the clause to demonstrate that the parties intended that the future advance or &lsquo;other debt' would be secured by the dragnet clause.” Id.&nbsp;Antecedent debt must also be described with specificity. Id.

SECURING FUTURE ADVANCES

There is no known difficulty in enforcing such clauses provided the sums advanced are reasonable and necessary. Some forms require a 10-day written notice to the borrower prior to making certain advances in order for the funds advanced to be recoverable from the borrower.

SECURING ADDITIONAL ADVANCES TO PROTECT THE COLLATERAL, INCLUDING PAYMENT OF TAXES AND INSURANCE

Both corporate and individual trustees are allowed, with no special qualifications in the statute. AS 13.36.215. Professional trustees are preferred and a foreclosure trustee (other than a licensed and active member of the Alaska Bar or a State agency) must obtain a $100,000 surety bond to protect the trustor and beneficiary from trustee fraud or defalcation. AS 34.20.125. Typical practice is to name the local title company that has provided the lender's policy of title insurance.

CORPORATE OR INDIVIDUAL

This is not a statutory requirement, but because of the emphasis the courts place on notice, a trustee without a local presence might be disfavored. See also the bonding requirement mentioned above for most trustees.

RESIDENCY REQUIRED

Nonjudicial: A Notice of Default (NOD) is recorded after the deed of trust is 30 days or more in default. Within 10 days, a copy of the NOD must be sent by certified mail to all parties with an interest in the property. AS 34.20.070. Not less than 30 days before the sale, a Notice of Sale must be posted in 3 public places within 5 miles of the place where the sale is to be held and published once a week for 4 consecutive weeks in a newspaper of general circulation published nearest the place of sale. AS 09.35.140. The Notice of Sale must also appear on a qualifying internet website starting at least 45 days prior to the sale and continuing through the last day of newspaper publication. AS 09.35.140. Sale is by outcry auction not less than 90 days after the NOD was recorded, and sale is to be held at the front door of a courthouse of the superior court in the judicial district where the property is located unless the deed of trust specifically provides that the sale shall be held in a different place. Bids can be accepted by telephone, electronic mail, and the internet. The foreclosure sale may be postponed by public announcement of the new sale date at the date and time of the original sale. AS 34.20.080. The Alaska Supreme Court has ruled that no other notice need be given to the borrower; the burden is on the borrower to attend the sale or contact the foreclosure trustee or its attorney to learn the status of the sale. Farmer v. Alaska USA Title Agency, Inc., 336 P.3d 160, 163-64 (Alaska 2014). AS 34.20.070 allows a trustor to cure a default during the pendency of the action, but after two cures of the same deed of trust, the trustee can reject the cure and continue with the sale. Judicial: Proceeds as a regular civil lawsuit, beginning with filing and service of a summons and complaint and culminating in a money judgment and a decree of foreclosure and order for sale of the property. AS 09.45.170. Notice of the sale is posted and published as with nonjudicial foreclosures. AS 09.35.140. The judgment creditor may, upon motion, apply for a court order confirming the sale. AS 09.35.180.

BRIEF DESCRIPTION OF PROCEDURE

There is no redemption (except by the IRS) after a nonjudicial foreclosure. AS 34.20.090. After the confirmation of a judicial sale, the trustor has a 1-year redemption period; junior lienors have 60 days. AS 09.35.230; AS 09.35.250.

REDEMPTION PERIOD AND PRICE

There is no statutory mechanism for waiver or reduction.

WAIVER OF REDEMPTION; REDUCTION OF REDEMPTION PERIOD

No further “action or proceeding” to collect a deficiency is allowed after a nonjudicial foreclosure except for certain federal agencies with national loan programs (VA, SBA), although other collateral pledged to secure the same debt may be realized only if this can be done nonjudicially. AS 34.20.100. The foreclosing mortgagee may collect on a deficiency after a judicial foreclosure through normal judicial remedies, although no separate deficiency judgment is entered. AS 09.45.180.

DEFICIENCIES

Leases junior to the deed of trust will be extinguished by foreclosure if notice of the foreclosure is given to the lessee. AS 34.20.090.

EFFECT OF FORECLOSURE UPON LEASES

After over 30 years of decisions holding that Alaska's Unfair Trade Practices Act did not apply to real property transactions, including mortgage loan servicing and foreclosures, a divided Alaska Supreme Court ruled in 2016 that the Unfair Trade Practices and Consumer Protection Act did apply to violations of the Fair Debt Collections Practices Act, including foreclosures. Alaska Trustee, LLC v. Ambridge, 372 P.3d 207 (Alaska 2016).

APPLICABILITY OF UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION ACT AND FAIR DEBT COLLECTION PRACTICES ACT

The greater of 10% or five percentage points above the annual rate charged member banks for advances by the 12th Federal Reserve District on the day on which the contract or loan commitment is made. AS 45.45.010.

USURY CEILING

Loans over $25,000 are exempt from the usury limit, as well as loans to which a federal exemption from state usury laws applies. AS 45.45.010.

USURY EXEMPTIONS

For fixtures, timber to be cut or extracted collateral, file in the recorder's office in the recording district where the collateral is located. All other filings must be made in the Department of Natural Resources' central filing office in Anchorage. AS 45.29.501. Existing filings in the district offices cannot be continued in those offices unless they relate to fixtures or related filings, and a new financing statement must be filed in the central office.

LOCATIONS FOR FILING

A deed of trust is effective as a fixture filing from the date of recording if it indicates the goods or accounts it covers, the goods are or are to become fixtures on the real property, and the deed of trust otherwise satisfies the requirements of a financing statement. AS 45.29.502.

SECURITY INSTRUMENT AS FIXTURE FILING

AS 34.20.160(a) requires a lender who wishes to preserve the right to sue on a note prior to foreclosing a deed of trust to affirmatively advise the trustor “and any other party bound by the note” of the lender's election in writing “within the note or as a separate document.” AS 34.20.160(b) includes safe harbor language to include in a note regarding the lender's reservation of this right. No safe harbor language or other guidance is provided when using “a separate document.” Thus far, there are no cases addressing this, and local practice varies with the cautious approach (when the lender will not include the statutory safe harbor provision in the note but wants to preserve the right) urging the lender to create a standalone document to be executed by the borrower and any other parties bound by the note (e.g., guarantors).

UNUSUAL PROVISIONS OR REQUIREMENTS

No Alaska statutes relate to guarantees. Under certain circumstances, it may be possible for the statute of limitations to be waived, but there is no guidance in Alaska law regarding the enforceability of such a waiver. The anti-deficiency statute that prohibits pursuing the borrower for a deficiency after a nonjudicial foreclosure applies also to guarantors or other sureties. AS 34.20.100. This protection probably cannot be waived.

SPECIAL PROBLEMS IN ENFORCEMENT OF GUARANTY

No deficiency may be pursued after a nonjudicial foreclosure. AS 34.20.100. This statute “limits the creditor's rights to pursue further legal action or process against his debtor for any deficiency in the obligation following a non-judicial foreclosure of the property. The limitation does not bar the retention of additional security specifically pledged on the obligation.” Hull v. Alaska Fed. Sav. &amp; Loan Assoc. of Juneau, 658 P.2d 122, 125 (Alaska 1983).No separate “deficiency judgment” is obtained in a judicial foreclosure action. AS 09.45.180. There is a single judgment for the total amount due on the loan as determined in the judicial foreclosure proceeding, coupled with an order permitting the judicial sale of the property. AS 09.45.170. The judgment must be enforced against the property before any deficiency can be pursued. The amount of the successful bid at that sale is credited against the judgment, and the difference between the bid and the judgment amount establishes the deficiency. AS 09.45.180. The Alaska Supreme Court has held that the foreclosure sale bid is valid so long as it is not so low as to “shock the conscience” of the court. Baskurt v. Beal, 101 P.3d 1041, 1044 (Alaska 2004). “A purchase price of less than 15% of market value may trigger an evaluation by the court to determine if anything untoward occurred in the sale process.” Thomas v. Joseph P. Casteel Trust, 496 P.3d 403, 411 (Alaska 2021).Note the application of the doctrine of res judicata and the “rule prohibiting splitting a cause of action,” as adopted by the courts of the State of Alaska, including as set forth in Tolstrup v. Miller, 726 P.2d 1304, 1306-07 (Alaska 1986), which holds that a second suit is barred “when the matter therein could have been decided in the first suit,” including claims that could have been brought, but were not, and Osborne v. Buckman, 993 P.2d 409, 412 (Alaska 1999), which holds that all claims arising out of a single transaction must be brought in a single suit, and those that are not become extinguished by the judgment in the suit in which some of the claims were brought.

ISSUES AND GUIDELINES RELATED TO SEEKING/OBTAINING DEFICIENCY JUDGMENTS

3 years for contracts, which can probably be extended in the contract itself. AS 09.10.053. By judicial decision, the limitation period begins to run from the date the breach was or should have been discovered. Bauman v. Day, 892 P.2d 817, 828 (Alaska 1995). However, promissory notes are subject to a separate statute of limitations of 6 years under the UCC; it is not clear that this limit can be extended. AS 45.03.118. The Alaska Supreme Court has held that the limitation period for beginning a foreclosure action is the same as the limitation period on the underlying note in most cases. Osborne v. Buckman, 993 P.2d 409, 412 (Alaska 1999).

STATUTE OF LIMITATION PERIOD

Lender provides request for reconveyance, original note and original deed of trust to trustee. Trustee prepares a deed of reconveyance, which must be acknowledged before a notary in the same manner as a deed of trust or mortgage and recite payment or other satisfaction or discharge of the lien. AS 34.20.115. When the original documents are not available to include with the request for reconveyance, common practice is for the lender to substitute another party as the trustee who is willing to execute the deed of reconveyance.

REQUIREMENTS FOR RELEASE OF LIEN

A nonjudicial foreclosure is not affected by the homestead exemption. Prior to judicial confirmation, the owner of homestead property sold at judicial sale has right to redeem within 60 days after sale. AS 09.38.010.

HOMESTEAD ISSUES

Alaska has enacted the Uniform Community Property Act, codified as 34.77.010, et seq. Common law property rules apply unless the spouses have executed a written community property agreement. If real property is titled in the name of only 1 spouse, or if it is titled in the alternative, using the names of both spouses with the word “or,” then a spouse whose name is on the title may manage and control that property, including encumbering it, while acting alone. A bona fide purchaser for value, including a mortgagee, may acquire such property or a valid mortgage on it despite knowledge of the existence of a community property agreement unless it has notice of the adverse claim of the other spouse. Prudent practice would be to obtain the signatures of both spouses or a waiver of community property and other marital rights by the other spouse. If the property is title in the names of both spouses jointly (“and” rather than “or”), then both spouses must join in the transaction.

COMMUNITY PROPERTY

MORTGAGE TAX

DOCUMENTARY STAMP TAX

TRANSFER TAX

The Alaska Supreme Court construes forum selection clauses broadly, releasing a party from a clause only when necessary to preserve justice or a compelling state interest. Resqsoft, Inc. v. Protech Solutions, Inc., 488 P.3d 979, 984 (Alaska 2021). Forum selection clauses referencing a non-Alaska court may give rise to questions regarding the enforceability of any judgment rendered by the non-Alaska court in light of the decision adopted by the Alaska Supreme Court in Abadou v. Trad, 624 P.2d 287 (Alaska 1981) where the Alaska Supreme Court had occasion to consider the effect of a forum selection clause designating Lebanon as the forum for resolution of all claims arising out of a contract respecting joint ownership of lands located in Alaska. The Alaska Supreme Court first determined there was no statute containing “language of exclusivity” specifically prohibiting the resolution of such actions in another forum. Id. at 290. Therefore, absent evidence of some other factor rendering such a result inequitable (such as inequality of bargaining power), the forum selection clause prevailed over the venue statute. Id. at 290-91. The court noted, however, that the Lebanese court would not have jurisdiction to order a partition or judicial sale as requested in the plaintiff's complaint, noting that “[t]he only state which can, by operation of law and apart from the act of the parties, transfer title in land out of one person and into another is the state where the land lies.” Id. at 291 n.6 (quoting R. Leflar, American Conflicts of Law &sect; 173 (3d ed. 1977)). However, the Lebanese court could, by virtue of its in personam jurisdiction over the parties, order the parties to execute deeds to the property as among themselves, or order other relief appropriate under the contract. Id. at 291. The court noted that the fact that the case must be brought in a Lebanese court in the first instance did not necessarily mean that the Lebanese judgment would be effective in Alaska, and that “only if [the plaintiff] cannot obtain relief in that forum should he be able to re-file his action in an Alaskan court.” Id. at 292-93.

ENFORCEABILITY OF AGREEMENT OF BORROWER AND LENDER AS TO CHOICE OF LAW PROVISIONS

Receiverships are possible, but the statutes provide limited guidance. AS 09.40.240-250. Most mortgagees rely on the assignment of rents clause in the deed of trust.

RECEIVER AVAILABLE

None known. Alaska generally leaves these matters to federal law.

ANY PROHIBITION OR SPECIAL RULES REGARDING LOAN APPLICATION, LOAN FEES OR COMMITMENT FEES

Alaska law requires residential mortgage lenders, brokers, and originators doing business in Alaska, even if located outside of Alaska, to be licensed. AS 06.60.010-.012. Banks and other financial institutions chartered and subject to supervision and regulation under federal law or the law of another state are exempt. AS 06.60.015. The licensing process requires a background check and, for originators, competency testing. AS 06.60.027; AS 06.60.040. Mortgage lenders and brokers are subject to a bonding requirement. AS 06.60.045.

LENDER QUALIFICATION AND/OR LICENSURE

No special statutory requirements exist for loan modifications at present.

LOAN MODIFICATIONS

Alaska law provides that the State of Alaska has a lien for the costs of response, containment, removal, or remedial action incurred by the State resulting from a release of oil or a hazardous substance. The lien attaches to all property owned by a person determined to be liable for the cleanup costs pursuant to Alaska's strict liability for hazardous substances statute or other state or federal law. The lien includes interest from the date of expenditure, and the State may file an action to foreclose the lien. A person with an ownership interest in the property who is not liable for the cleanup costs may sue to have the lien released, to the extent of the person's ownership interest. AS 46.08.075.

ENVIRONMENTAL LIEN LAW ISSUES

The Alaska Bar Association has not adopted any opinion articulating accepted standard practices for attorneys rendering legal opinions.

LEGAL OPINIONS

A. INCEPTION OF LABOR AND MATERIAL LIEN (PRIORITY OF LIEN OF DEED OF TRUST OR MORTGAGE): In general, the determination of whether a deed of trust or a labor and material lien has priority turns on which was recorded first. The statute provides that an encumbrance that is properly recorded shall be preferred to the labor and material lien unless the claim of lien or notice of right to lien was recorded before the encumbrance. The preference for the prior-recorded deed of trust applies without regard to when the sums secured by the deed of trust were disbursed or whether the disbursements were required by a loan agreement. AS 34.35.060.There is one important exception to the foregoing rule. A lien in favor of an individual actually performing labor in the original construction of a building or other improvement, or in favor of the trustee of an employee benefit trust for such individuals, is preferred over even a prior recorded deed of trust. Note that this exception is limited to a lien for labor and does not apply to claims for materials, and is limited to original construction. AS 34.35.060. Because the claim of lien can be filed up to 90 days after the labor stopped being furnished and then relate back to the date the labor was furnished, a lender reviewing the title to the property would be without warning of the possibility of the lien without inspecting the property for evidence of recent construction.B. PRIORITY AS TO REMOVABLE FIXTURES (PRIORITY OF LIEN OF DEED OF TRUST OR MORTGAGE): No statutory provision specifically addresses whether the labor and material lien or a deed of trust would have priority as to removable fixtures. However, the statute does provide for the labor and material lien to attach to materials delivered to the property without regard to whether they are fixtures so long as the materials have been or are about to be applied in good faith to the construction, alteration, or repair of the building or other improvement. AS 34.35.105. Based on this, it would be arguable that because the labor and material lien must attach to materials before they are attached to the real property as fixtures, at which point the lien of the deed of trust could attach to them, the labor and material lien must have priority over the deed of trust lien. This, however, is an unanswered question in Alaska law.

LABOR AND MATERIAL LIEN CLAIMS—PRIORITY ISSUES

The form almost universally used by lenders in Alaska is the ALTA Lender's (or Mortgagee's) policy, which requires an as-built survey and insures against claims of adverse possession, encroachment and boundary problems.

FORM USUALLY REQUIRED BY LENDER

According to one local title insurance agency, over 150 different endorsements are available, far too many to conveniently list here. Some of the more common are:<ul><li>ALTA 3.1-06 (CLTA 123.2-06): insures the zoning of improved property</li><li>ALTA 8.1: insures against environmental protection liens</li><li>ALTA 11: insures the modification of a previously insured deed of trust</li><li>ALTA 17.1-06 (or ALTA 17-06 as applicable): insures that property has access to an open street</li><li>ALTA 18.1-06: multiple tax parcels</li><li>ALTA 22.1-06 (location and map)</li><li>ALTA 28-06: insures that easements do not affect improvements on real property</li><li>CLTA 100-06: insures against loss or damage on improved properties due to enforcement of covenants, conditions or restrictions</li><li>CLTA 108.8-06 Additional advances.</li></ul>Endorsements also exist for protection against labor and material liens.&nbsp;

Alaska

Mortgage Law Summary

Continue reading the
Mortgage Law Summary for Alaska

Alaska

Mortgage Law Summary

Continue reading theMortgage Law Summary for Alaska

Continue reading the
Mortgage Law Summary for Alaska