When investing in Trust Deeds, there are several key components. One of the keys is equity. Private Money is based on equity protection for the investor. Another critical piece is a clear title to the property.
Why is title insurance so important? It protects the new lender from fraud and other issues that can affect their position and their money.
Here are a few questions the title company can answer that will aide in making a smart loan:
- Are there outstanding taxes, city violations or liens, or judgements against the property?
- What is the legal description of the property?
- What is the priority (position) of the lender’s security for the loan?
- Are there existing loans secured by the property?
- Is there a pending foreclosures or action against the property?
- Is the person borrower the money involved in a bankruptcy?
- Does the person borrowing money already have an existing interest in the property beings collateralized?
Title insurance is issued after a careful review of public records. In addition to matters shown by public records, other title issues may exist that cannot be disclosed in a search. Some of those are the following:
- False impersonation of the true owner of the property
- Forged Deed, Releases or Wills
- Undisclosed or Missing Heirs
- Instruments executed under invalid or expired power of attorney
- Mistakes in recording legal documents
- Misinterpretation of wills
- Deed signed by persons of unsound mind
- Deeds signed by minors
- Liens for unpaid estate, inheritance, income or gifts taxes
Always ask for a title insurance policy when loaning money secured by real property. Leave the research to the title insurance experts, backed up by a policy of title insurance to secure your position.
We will always get you a clear title policy along with either a property visit or an appraisal. Please call us for Trust Deed Investments. Call Michael Cushner at Cushner Capital Group – (760) 845-9035.