SECTIONS 12420-12428 - California Statutes

INSURANCE CODE

SECTION 12420-12428

12420. The definitions set forth in this article shall govern the
construction of the terms used in this chapter but shall not affect
any other provisions of this code.

12421. Unless the context indicates a different construction the
following definitions and restrictions govern the interpretation of
the terms specified:
(a) "Note" includes "bond."
(b) "Real estate" includes real estate with the improvements
thereon, including improvements in process of construction under a
building loan.
(c) "Building loan" means a loan made for the purpose of providing
funds for the construction of improvements upon real estate.
(d) "Public bond" includes only bonds issued pursuant to statutory
authority by the officials of a county, city, town, municipality or
district where each bond constitutes a lien upon specified land
described therein or represents a special assessment theretofore
levied which is a lien upon specified land described in the bond.
(e) "Assessment" includes only special assessments levied pursuant
to charter or statutory authority by a county, city, municipality or
district.
(f) "Security" means a note evidencing a debt secured by a
mortgage constituting a lien or charge on real estate.

12422. "Authorized real estate security" means security which
complies with all the following conditions:
(a) The securing mortgage is a first mortgage upon the title in
fee to real estate, such real estate being improved or productive or
a building being in process of construction thereon by means of a
building loan.
(b) The principal loaned on such security, or if a number of
securities are secured by a single mortgage, the aggregate principal
so secured, plus the amount of the lien of any public bonds, or
assessments upon the property or properties loaned upon, does not
exceed 66 2/3 per cent of the fair market value of the real estate.

12423. "First mortgage" means a mortgage constituting a lien or
charge on the title in fee to real estate, such lien or charge being
prior and superior to all other liens or charges on the real estate
except:
(a) The lien of any public bond, assessment or tax, when no
installment, call or payment of or under such bond, assessment or tax
is delinquent.
(b) Outstanding mineral, oil or timber rights, rights of way,
easements or rights of wall or support, sewer rights, building
restrictions or other restrictions or covenants or conditions or
regulations of use, or outstanding leases upon such real property
under which rents or profits are reserved to the owner thereof.
For the purposes of this section, delinquent taxes funded on any
deferred payment plan shall be deemed delinquent.

12424. "Mortgage participation certificate" means an instrument,
issued by a mortgage insurer, which constitutes an assignment of or
which evidences the ownership by the assignee, of either an undivided
share or interest, legal or equitable or both, or the right to
participate to a specified extent in a group of securities in a
mortgage participation trust.

12425. Group of securities means one or more securities, together
with the proceeds thereof, segregated from the assets and securities
of a mortgage insurer and assigned in a mortgage participation trust.

12426. (a) "Group value" means the aggregate value of the following
assets held by a trustee in a single mortgage participation trust:
(1) Securities.
(2) Real estate acquired through foreclosure of defaulted
securities, or through conveyances made in lieu of such foreclosure.
(3) Cash, other than cash received as interest on securities.
(b) For the purpose of determining such group value:
(1) The securities in such trust are valued at the unpaid
principal thereof.
(2) Real estate acquired by foreclosure of any defaulted security,
or by conveyance in lieu of such foreclosure, is valued at the
unpaid principal of such defaulted security as of the date of such
conveyance or of the date of the sale under which such property is
acquired by the trustee.

12427. A "mortgage participation trust" means a trust established
by the assignment and transfer to a trustee of a group of securities
the payment of all of which securities is insured, either singly or
as a group, by a policy or policies of mortgage insurance, in which
undivided shares or interests or rights to participate may be or have
been assigned by means of mortgage participation certificates.

12428. The term "trustee" means a trust company as defined in the
Bank Act and includes a national bank having a trust department and
doing business within this State.