What a Master Mortgage Is
A master mortgage is a recorded document that contains the standard terms and conditions a lender uses across many loans. Instead of printing those same pages into every individual mortgage, the lender records the master document once and then each borrower's mortgage simply references it. The referenced terms become part of the borrower's mortgage as if they were written out in full.
Thereafter any provisions of a recorded master mortgage may be included for any and all purposes in a mortgage by reference therein to any of such provisions without setting them forth in full, if the master mortgage is of record in the county in which the mortgage adopting or including by reference any provisions thereof is recorded.
A.R.S. § 33-415(C)This is a practical efficiency measure. It reduces the paperwork recorded with the county and keeps individual mortgage documents shorter and easier to read.
How Constructive Notice Works Here
Recording the master mortgage creates constructive notice of its contents. That means anyone dealing with the property is treated as if they know every term in the master document, even if they have never read it. The borrower is bound by the referenced provisions the same way they would be if those provisions appeared in their personal mortgage.
Recording a master mortgage which has included therein any provisions by reference as provided in this section shall operate as constructive notice of the whole thereof, including its terms, as a part of the written contents of any such mortgage.
A.R.S. § 33-415(E)For homeowners transferring property into a living trust or refinancing after estate planning changes, understanding that the full mortgage terms may be spread across two documents is helpful. The individual mortgage and the master mortgage together form the complete agreement.
