Mortgages Offer Investor Protection

What protection does a Mortgage offer an Investor?
A Mortgage is a signed, notarized legal document, a piece of paper that secures the note and loan you make on a particular real estate property. The mortgage shows the names of the borrower (the Trust or) and the lender (the Beneficiary), the loan amount, and the property that secures the loan. The mortgage contains a "power of sale clause" which gives the title company (the Trustee) the power to sell the property for you, the lender, in the event that the borrower does not repay the loan as agreed.

The mortgage is recorded and made a matter of record in the County (public records) where the property is located. The mortgage is signed by the borrower(s) and notarized, and specifies the parties, the amount, and a legal description of the real estate securing the loan. Accompanying the mortgage is a note, a promissory note, or a written promise to pay a certain sum of money to a certain person on a certain date. The note also states the interest rate and other terms of the loan. The note is signed by the borrower(s).

Position is Important to Protect
The position of a new note and mortgage, as a first, a second, a third or even a fourth mortgage is determined only by the date and the time that the mortgage was recorded.

For example, if you own property free and clear today and at 12:30 in the afternoon you gave someone a note and mortgage for $20,000 and at 12:55 you recorded it; but at 12:40 you had given someone else a note and mortgage and they had recorded it at 12:45, then the very first note you gave out at 12:30 would become a second mortgage because it was the second mortgage to be recorded according to the date and time.

This is why it is important to make loans by going through a bona fide, reputable, title insurance company. The title company is your "Trustee," the middle man. Always use a title company and get title insurance guaranteeing the actual position of your loan.

For further information please contact: Jorge Garcia-Pulido, President/CEO 305-796-4799

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