A deed of trust involves a grantor, grantee and beneficiary, while a mortgage is a contract between a borrower and lender. They also fall under different foreclosure types with different timelines. A mortgage needs a judicial foreclosure, which can take a long time, while a deed of trust is much faster and requires a nonjudicial foreclosure. Warranty deeds and deeds of trust serve to transfer property titles from one entity to another.
However, who they protect is different. The deed of trust protects the lender or beneficiary, while the warranty deed protects the property owner. When the transfer of a property title occurs by warranty deed, and its ownership goes from the grantor to the new buyer also known as the grantee , it guarantees that the previous owner wholly owned the property and can legally transfer it. A warrantee of deed guarantees that a new owner will not inherit future claims or liens against the property and lets them know that they own it outright once the title is in their name.
While a warranty deed guarantees that the grantor or original seller has the right to transfer the property title to a new owner and assures that it has no restrictions or liens, a quitclaim deed does not guarantee the validity of the grantor's authority for transferring the title. However, this type of deed is commonplace when there is some uncertainty regarding the property title. This is not the only legal context in which grantors exist. In a court order, a grantor is a lawsuit plaintiff.
They are also judgment creditors in an abstract of judgment. Some documents do clearly show who the grantor is, but others may only list them in a sale description. Michelle Nati is an associate editor and writer who has reported on legal, criminal and government news for PasadenaNow. She holds a B. Reviewed by: Michelle Seidel, B. Grantor: The entity whose assets are held in trust until payment of the loan occurs. A grantor is also known as a settlor or trustor.
The grantor remains the equitable owner as long they keep up their loan payments in the specific manner outlined by the deed of trust. Even though they do not hold the legal title to the property, they do enjoy the same benefits a property owner does.
When a Deed of Trust is properly prepared, signed, and filed with the County Clerk, a lien is created on the property to secure the repayment of the borrowed money. Note: The document must include the correct legal description of the property so that the lien is created on the correct property.
This is required by the Texas Property Code. The borrower must own legal title to the property that is being pledged to secure the borrowed money. Good to know: If the borrower defaults on the promise to repay the borrowed money, the lender is permitted to foreclose the lien to sell the property at a public auction.
The Texas Property Code sets out the Texas lien foreclosure process. Although a Deed of Trust is similar to a Mortgage, which is used in other states, it is not a Mortgage.
Good to know: Texas does not use mortgages. Instead, Texas uses Deeds of Trust. The document is referred to as a Deed of Trust because there is a Trustee named for the property. Even though there is a Trustee named, the Trustee does not do anything unless there is a default or a failure to comply with the promissory note or deed of trust.
With a Deed of Trust, a Trustee is named and authorized to sell the property at a public auction if there is failure to comply with the promissory note or the deed of trust. This is referred to as a non-judicial foreclosure sale, which means the Lender does not need to ask a court permission to foreclose its lien.
The Lender merely sends a letter to the Trustee and asks the Trustee to conduct the foreclosure. Note: The Texas Property Code prescribes the foreclosure process. Generally it requires that foreclosure sales are to be held on the first Tuesday of each month in Texas. The Trustee is required to give the Borrower 21 days prior written notice of the day of the foreclosure sale.
The Notice of Sale must contain the correct legal description of the property to be sold at public auction. Title to the property is transferred at the public auction for cash. The cash is applied to the borrowed money and expenses of the sale.
Good to know: Mortgages or other types of loans require the Lender to go to a court and ask permission to foreclose its lien to sell the property. The Borrower may have rights to file a lawsuit to stop a foreclosure sale if the Trustee or Lender fails to comply with the Deed of Trust or the Texas Property Code. If you loan someone money and want to secure the promise to repay the borrowed money with real estate, you will need a Deed of Trust.
To secure the loan, the Borrower, the person that owes you the money, signs a Deed of Trust to give you, the Lender, a lien on real estate. The Borrower does not need to own the property, BUT the person signing the Deed of Trust must own an interest in the property.
The buyer promises to maintain hazard insurance. The buyer agrees to occupy the property as their principal residence unless they are purchasing an investment property or second home.
The parties agree that when co-signers on the deed of trust are not both borrowers under the promissory note, the non-borrowing co-signor only conveys their interest in the property to the lender but is not personally liable for repayment of the debt under the promissory note.
Finally, the buyer agrees not to keep hazardous materials on the property. Real Estate. Cynthia Pela. Attorney Responsible for content: H. Terry Hutchens Website Disclaimer.
0コメント