The Porch

Deed of Trust and the Other Guy, and Naked Rights

Deed of Trust and the Other Guy, and Naked Rights

We were talking the other day and a few folks had the impression the lender was the only party involved (other than themselves) in their mortgage security, and that the nice mortgage company would send back their title when they paid off the loan.

'Sort of sounds correct, doesn't it?

 

 

 

 

 

Illustration of the borrowers and the lender ... when the mortgage is paid off...under mortgage theory.

 

 

But there's another party involved whenever a Deed of Trust is used (and generally is used in most Utah transactions)...other than the mortgage lender.

The deed of trust is a mortgage instrument creating security and third party oversight.

When a debt is secured by a mortgage, the borrower delivers his promissory note and mortgage to the lender, who keeps them until the debt is paid.

But when a note is secured by a deed of trust, three parties are involved: the borrower (the trustor), the lender (the beneficiary), and the neutral third party (the other guy--the trustee).

The lender makes a loan to the borrowers, and the borrower give the lender a promissory note and a deed of trust. In the deed of trust document the borrower conveys title to the trustee, to be held in trust until the note is paid in full.

This could be considered a distinguishing feature of a deed of trust.

The deed of trust is recorded in the county where the property is located and a copy goes to the lender and the trustee for safekeeping.

This "title" the borrower gives to the trustee is sometimes referred to as a naked title...or a bare title.

It's naked or bare because as long as the borrower makes his payments, there's nothing the trustee can do with the "naked" or "bare" title because there are no rights in it -- it is naked. It is bare.

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Almost sounds like real estate sex.

Mercy ........................

Trustor: One who creates the trust; the borrower.

Beneficiary:  One for whose benefit the trust is created; the lender in a deed of trust transaction.

Trustee:  One who holds property in trust for another party.

Naked Title: Title that lacks the rights and privileges generally associated with ownership.

From My Porch

 

 

Mike B. Class Star®

ClassStar® offers two, 3-hour core courses. Your business and referrals are appreciated.
The Porch weblog and all contents herein are © 2009 Mike Ballif. All rights reserved.

 

 

Vertical Leases and Management Ratios

Vertical Leases and Management Ratios

'Thought I might cover a few random concepts that are of interest to me and sort of fun to re-study …. a bit more fun than reading about the economy....

Mercy...

Vertical Leases.

A lease doesn’t need be only on the use of the earth’s surface. We can also lease land that extends from the center of the earth skyward. Donald Trump has made some successful sky space leases you may have read about.

It is possible for one party to own surface rights, another company to perhaps own oil and gas, or mineral rights below the land, and an entirely different party to own the air rights

A few railroads have leased surface and air rights above their downtown tracks (underground) or otherwise, for the purpose of constructing high-rise office buildings...

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Management-Unit Ratios

In apartment management, a working rule of thumb is that an on-site manager can effectively manage 50 or 60 units by himself.

From about 60 to 100 or so units the manger needs a helper.

100-150 Units: In properties over 100 units one will generally find a husband-wife team and a helper—perhaps a fulltime custodian.

200 Units. Typically would have an onsite husband-wife team plus two fulltime assistants, hiring another full-time helper for each additional 50 or so apartments.

From My Porch

Mike B. Class Star®

ClassStar® offers two, 3-hour core courses. Your business and referrals are appreciated.
The Porch weblog and all contents herein are © 2009 Mike Ballif. All rights reserved.