(a) When a lender uses a note as evidence of an obligation secured by a mortgage or deed of trust, the note must affirmatively advise the mortgagor or trustor and any other party bound by the note if the mortgagee or beneficiary wants the option to bring suit directly on the note to collect an amount owing under the note without first foreclosing the mortgage or deed of trust. This option must be stated in writing within the note or as a separate document. If a note executed after May 24, 1988 fails to contain the notice specified in this section, the debt secured by the mortgage or deed of trust may be foreclosed under Alaska Stat. § 09.45.170 – 09.45.220 or Alaska Stat. § 34.20.070 – 34.20.135.
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Terms Used In Alaska Statutes 34.20.160

  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Deed: The legal instrument used to transfer title in real property from one person to another.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Mortgagee: The person to whom property is mortgaged and who has loaned the money.
  • Mortgagor: The person who pledges property to a creditor as collateral for a loan and who receives the money.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Trustor: The person who makes or creates a trust. Also known as the grantor or settlor.
  • writing: includes printing. See Alaska Statutes 01.10.060
(b) If the mortgagee or beneficiary wishes to collect an amount owing under the note without first foreclosing the mortgage or deed of trust, the following language is sufficient in the note:

The mortgagor or trustor (borrower) is personally obligated and fully liable for the amount due under the note. The mortgagee or beneficiary (lender) has the right to sue on the note and obtain a personal judgment against the mortgagor or trustor for satisfaction of the amount due under the note either before or after a judicial foreclosure of the mortgage or deed of trust under Alaska Stat. § 09.45.170 – 09.45.220.

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