Hello all,
This new law about not being able to sell on a contract for deed unless you record it within X number of days is hampering my selling.
Many of my properties are mortgaged with the banks so this now makes me do L/O’s with my buyers. I like L/O’s for ease of getting rid of bad tenants but, I would like to put some of these buyers on auto pilot (more like a contract for deed). What do you Texas Investors do now?
Great $uccess,
Dee-Texas
Dee,
Sorry, it’s my goal to not have any posts go unanswered, but I slipped on this one… :oops:
I was actually selling the beneficial interest in my trust, but after recent events, I’m going to start just doing a note and deed of trust for a wrap. I’m thinking I may request the buyer put the property right back into a similar-named trust to make insurance easier, but that’s up in the air right now.
An attorney told me recently that I didn’t want to have to be in the position of trying to foreclose on a beneficial interest, especially since I wasn’t recording any sort of security instrument with the transaction. I asked if a UCC-1 would suffice and was advised to go the simpler route.
I will sell on a note and deed of trust as well. The deed of trust is filed with the court house. The deed made out to them is kept in escrow, a nice filing cabkinet that lloks amazingly similar to one in my office.
Good luck.
Terry
Terry,
That’s an interesting idea. Have you gone through a foreclosure with this route, and if so, what happened? Not filing the deed would perhaps make things easier, but I would assume this would invalidate the existing insurance if the payee were still a trust?
The trust would no longer have an insurable interest since the trust was not the owner. However, the new buyers just might decide they need to place the property back into a trust with my entity as trustee? :brow
Please provide more details. Thanks.
If I have to foreclose then I would have to file the deed.
My hope is that I can talk them into leaving without going through all of that. :banana
If not, :argue the deed is filed. If they just leave then nothing changes on the existing deed. :thumbsup
As to the insurance, I list the prior owner, who I bought subject to from, and the new owner with the trust as a “lender” or additional insured.
Hope that clears it up like mud.
Now, why won’t you sell the beneficial interest in a trust? What happened?
Terry
TW,
It’s just what I was told recently by an attorney who stays pretty involved with creative real estate. I suppose it’s still feasible to sell the beneficial interest as long as a security instrument is filed. I wasn’t doing that as I didn’t want to mess with title in any way. :eek6
I also don’t want to go to the trouble of figuring out all the PacTrust docs. Now that Bud is online, I may have to start exploring (or debating) that again. :monalisa
Okay, so I understand new owner with trust as lender routine. It’s clean and true, except that the original borrower no longer has an insurable interest, but you’re still listing original borrower as loss payee?
I know that I had several instances where existing policies were automatically rejected when sold to new servicers due to the fact that the original borrowers’ names were NOT part of the loss payee. To overcome that, I just started including their last name in the trust title and I haven’t had any issues since.
My preference is to not have to mess with the current insurance which is why I was thinking I could have the buyers put the property right back into the trust. I still don’t see any holes with that one.