Home Selling in 32444>Question Details

Donna, Other/Just Looking in 32444

If owner finance, is a mortgage and warranty deed still required by law to be filed.

Asked by Donna, 32444 Fri Jun 17, 2011

Sister is looking buy property in Florida, putting a large chunk of money down with owner holding note for the rest. Doing this, is the owner requried to file these two docs to protect both parties?

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Tax liens against the property would be my biggest concern for both parties since such liens could easily negate the value of the property or note. The deed and note would still be valid if unrecorded, but 3rd parties could record liens against the property without your knowledge and they would hold priority over unrecorded documents, until satisfied. It would be very risky for either party to not record their respective document.
1 vote Thank Flag Link Fri Jun 17, 2011
The title company or attorney is the entity that should be recording the documents. Make sure that your sister has representation of her own i.e. an attorney if using the sellers title and attorney to produce the documents and closing. This will make sure the documents are recorded and that the mortgage is not slanted towards the sellers interests only. You sister will want to also get an amortization schedule updated every year to make sure the seller is keeping track of the payments correctly and taking the right amounts off the principal. Make sure that she does not do a payment for deed scenario and its a real purchase and mortgage - thus the necessity for an attorney to represent her.
0 votes Thank Flag Link Fri Jun 17, 2011
Recommend for you refer your questions to an attorney ... property owner own this home 100% with no mortgage or do they still have a mortgage?

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Fri Jun 17, 2011
Owner financing is required to record the document and your sister would have to pay the stamps on the loan, this would be about 35cents per hundred dollars of the loan amount rounded to the nearest hundred!so if the house is $130,000 and your sister put $30,000 down the loan amount by the owner finance would be $100,000 and this should be recorded with the county, The stamps required by the county on this record would be 1000 x .35 or $350, the seller would pay the stamps on the sale which would be 70 cents on each 100 dollars of the sale rounded off to the nearest hundred so in this case that would be for the sale price of $130,000 or 1300 x .70 which is $910 and this is what should be done!
0 votes Thank Flag Link Fri Jun 17, 2011
(Legal disclaimer: The following is not legal advice and you should confirm it with a 30 second -or how ever long it takes- phone call to a qualified legal professional.)

Should you? YES! Required by law? Let's just say you wouldn't face criminal penalties.

Would you face civil penalties? Perhaps if the new owner is told they need to pay for a fence they didn't ask for that was there when they bought it because a a fence builder put a mechanic's lien on it.

However you may want a mortgage originator and title company to do the paper work to stay in compliance with the recent SAFE Act.

If it's a land contract then the seller still retains legal title. If it's a promissory note and deed of trust (or mortgage) then you do it just like the bank would.

Fun Fact:
If it were in California you actually COULD NOT use a warranty deed because we took the land from the Mexicans and ever since the Mexican American war from 1846-1848 was ended by the Treaty of Guadalupe Hidalgo we have not been able warrant clear title.

I hope that was both an informative and entertaining answer! If your sister home seller needs to sell that monthly payment stream, I can buy it from them if they agree to the current market price! (...and I can pay you both a referral fee too!)

For pricing visit: http://cash4promissorynotes.com/default.aspx and click on "Get Pricing"
0 votes Thank Flag Link Fri Jun 17, 2011
Recording the deed of trust protects the buyer more than the seller, Donna. Without it being recorded, the seller could plausibly sell the property again. It is not necessary to record the note.
0 votes Thank Flag Link Fri Jun 17, 2011
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