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.


Almost sounds like real estate sex.



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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.

New Utah Law ... Minimum Charge For Escrow Services

On January 22, 2009 the Title and Escrow Commission in conjunction with the Utah State Insurance Department invoked a new rule:

Rule R592-13. Minimum Charge For Escrow Services.

This new rule requires all title insurance agencies operating in the state of Utah to charge a uniform minimum fee for escrow services.

The fee amount is determined by the purchase price/ loan amount of the transaction and includes the combination of both the closing/ settlement fee and the document preparation fee.

These are the new rates, effective April 1, 2009:

Purchase Price/ Loan Amount	Minimum Escrow Fee
$0 to $180,000.00	$150 per side
$180,000.01 to $250,000.00	$250 per side
$250,000.01 and above	$350 per side

Note this is a minimum fee.


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This is the rule as published by the insurance commission,

( http://www.insurance.utah.gov/rules/ .... scroll to the bottom of the web page ...)


R592. Insurance, Title and Escrow Commission (Effective 1-22-09)

R592-13 Minimum Charges for Escrow Services

R592-13-1. Authority.
This rule is promulgated by the Title and Escrow Commission
pursuant to the authority provided in Section 31A-2-404,
authorizing the Title and Escrow Commission to write rules, and
Section 31A-19a-209, authorizing rules to establish minimum
charges for escrow services.

R592-13-2. Purpose and Scope.
(1) The purpose of this rule is to establish minimum charges
for escrow services.
(2) This rule applies to all title insurers, agencies and
producers providing escrow services in Utah.


R592-13-3. Definitions.
In addition to the definitions of Sections 31A-1-301, 31A-2-
402,and 31A-19a-102, the following definitions shall apply for the
purpose of this rule:

(1) "Charge" means a dollar amount charged for a service
rendered by a title insurer, title agency, or title producer.

(2) "Minimum escrow fee" means the lowest amount that can be
charged for escrow settlement services that are rendered which
incorporates both the escrow closing charge and the basic
document preparation charge.

(3) "Pass through charges" means the actual and reasonable
charge or expense for services rendered that are not included in
the minimum escrow fee.

R592-13-4. Minimum Charge for Escrow Services.
(1) A title insurer, agency and producer providing escrow
services in Utah must not charge less than the minimum escrow fee
for each side of the transaction. The minimum escrow fee shall be
as follows:

Purchase Price/ Loan Amount	Minimum Escrow Fee
$0 to $180,000.00	$150 per side
$180,000.01 to $250,000.00	$250 per side
$250,000.01 and above	$350 per side

(a) As an example:

(i) On a real estate purchase of $100,000 the minimum
escrow fees would be as follows:
(A) $150 charged to the buyer;
(B) $150 charged to the seller.

(ii) On a refinance loan amount of $300,000 the minimum
escrow fee would be $350 charged to the borrower.

(2) All other charges or expenses must be actual and
reasonable passed through to the consumer.

R592-13-5. Penalties.
A person found, after a hearing or other regulatory process, to
be in violation of this rule shall be subject to penalties as
provided under Section 31A-2-308.

R592-13-6. Enforcement Date.
The commissioner will begin enforcing this rule 90 days from the
rule's effective date.

R592-13-7. Severability.
If any provision of this rule or the application thereof to any
person or circumstance is for any reason held to be invalid, the
remainder of the rule and the application of the provision to
other persons or circumstances shall not be affected thereby.




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 © 2008 Mike Ballif. All rights reserved.