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April 19, 2016

Good Deed Bad Deed

A deed is a document that transfers ownership of real estate from grantor to grantee. As there are usually two parties involved, the grantee wants to “receive the most” and the grantor wants to “give the least”. For this reason there is a gradient of “what is given”, ranging from virtually nothing being assured, to virtually absolute assurance going to the grantee.

Quit Claim Deed – used to transfer whatever ownership the grantor may have, possibly none whatsoever due to a title flaw. Grantee has no recourse. It’s also used to change vesting errors when a spelling error is in the vesting. It makes no warranty whatsoever.

Fiduciary Deed – issued by an agent (trustee, guardian, executor) acting in official capacity. Only the authority of the agent is warranted, think Quit Claim by other than “owner”. Often used by estates, trusts, sheriffs sales.

Bargain and Sale Deed – similar to Quit Claim, but the property is being sold rather than just relinquished. It does not guarantee that sellers’ ownership of the property is free and clear. Often used to transfer court seized property where the title chain is uncertain.

Trust Deed / Deed of Trust – used to secure a mortgage or note. It gives the trustee (typically the bank) the right to sell the property if the borrower defaults.

Grant Deed – provides assurance that the grantor owns the property and has not previously sold the property. And that there are no liens or encumbrances (made by the grantor) unless disclosed in the deed. Essentially saying the property is free of debt (of or by the grantor).

Special/Limited Warranty Deed – the grantor warrants clear title except for issues that existed prior to the grantor taking possession or are mentioned in the deed. Essentially the grantor is giving assurance that they did nothing to hinder clear title transfer. But, issues typically unknown to seller regarding title are not covered. Usually title insurance is required with the S/L WD to obtain bank approval for loans.

General Warranty Deed – Grantor conveys, without limitation, all of their right, title and interest to the property. Guaranteeing they are the rightful owner, property is free and clear of all encumbrances and debt (unless mentioned in deed). A key provision is that the grantor warrants the entire title chain, including issues prior to their taking possession to be clear, similar to title insurance. Grantor warrants having current title and possession.

Thus at one end of the spectrum is the quit claim deed, essentially saying “if it’s mine, it’s yours”; to the general warranty deed. With the GWD giving assurances as to clear ownership and the “Covenant of Quiet Enjoyment”. The COQE assuring the grantee will not be disturbed or dispossessed by a party having a lien or superior title. As is so often the case with legal documents, the devil is in the details. Fortunately, the title of the deed can quickly eliminate formats that are undesired. However, deeds are usually associated with purchases involving large sums of money, often the largest single purchase in a person’s lifetime. Many review the HUD, TIL, Note and Mortgage very carefully. But, they assume “a deed is a deed”. It’s best to have a skilled real estate attorney explain the deed prior to signing this important document.

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You might also like:

The Closing Disclosure
http://blog.123notary.com/?tag=closing-disclosure

The Signature Affidavit
http://blog.123notary.com/?tag=signature-affidavit

The Compliance Agreement
http://blog.123notary.com/?tag=compliance-agreement

Our string on Power of Attorney posts
http://blog.123notary.com/?tag=power-of-attorney

The Deed of Trust
http://blog.123notary.com/?tag=deed-of-trust

Affidavits — in general
http://blog.123notary.com/?tag=affidavit

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October 23, 2015

Notary Family Feud

Filed under: Virtual Comedy Themes — Tags: , , , — admin @ 12:38 am

I noticed that when I give my over the phone loan signing quizes, certain answers seem to be more popular than other answers. I have always found it very interesting that particular wrong answers that are blatantly wrong could be so popular. Maybe when I give loan signing quizes, I should test people on which answer was more popular. It might be good if the popular answers used were correct as well.

HOST: For $200, tell me some items you might find in a bathroom next to the sink?

CAROL: Oh, a brush, a hairbrush

SUE: A razor and a note!

FRED: Oooh, ooh, um…. toothpaste, yes… toothpaste.

HOST: Survey says…. toothpaste was the most popular answer with used Twinkie wrappers as #2. Next question….

HOST: For $400, tell me which document is the best document to look for the prepayment penalty?

CAROL: Oh… oh… The Deed of Trust

SUE: The HUD-1 Settlement Statement…. oh… on page 3.

FRED: I know this… oh… The Note, or the TIL

HOST: Survey says… the most popular answer was the Deed of Trust. Carol is the winner… or would be if that was correct in addition to being a popular answer, but that is wrong!

CAROL: What? But, I thought the Deed talked about every aspect of the transaction.

HOST: The actual agreement about the transaction is covered in The Note while the Deed functions as a Security Instrument.

FRED: So I win again?

HOST: Yes, you win. And you can cash in your $600 for a trip to the next NNA Convention, or get a free listing on 123notary.com with Elite Certification. Or a trip to Hawaii where you can enjoy a 5-star hotel, gourmet foods, and a complimentary neck tattoo!

FRED: Yes, can I get Jurat wording on the neck tattoo?

HOST: That is a state specific question for your Secretary of State’s Notary Division!

FRED: Maybe you should make that a question on the next Notary Family Fued… Survey Says…..

SUE: Since I have been a good sport, can I get a free gas card?

HOST: You’ll have to guess correctly on the next question.

SUE: Okay… I got it…

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July 17, 2015

Honey, You Can Kiss my App!

GPS: You will be approaching the Deed of Trust in 3 seconds… You have arrived at your destination.

MARCY: Well, I’m a new notary, so what do I do now?

GPS: What do you think is next, do you want me to tell you to wash your hair and then repeat?

MARCY: I’m sorry, could you repeat that?

GPS: Never mind. Have the borrower initial all of the pages of the Deed of Trust in the small horizontal line in the bottom corner.

MARCY: But, this has 15 pages!

GPS: You heard me girl.

MARCY: Okay, we are going to sign the Note now, and then these other documents…. Okay, we finished signing the HUD-1.

GPS: You go girl! Okay, now let’s take a look at that Flood Affidavit.

MARCY: Gee, the app says you can explain this to me in Chinese, but I don’t speak Chinese. Hmm, I wonder what happens if.

GPS: Qing ni zai qian ge ming zai zui hou de ye.

MARCY: Yet another thing that was made in China. I better switch it back to Chantelle.

GPS: Do you realize what you just did?

MARCY: Yeah, I switched you to Li-Wen for 30 seconds. I didn’t know what that button did.

GPS: Well, you should be more careful. That app doesn’t exactly steer you towards the nearest Chinese restaurant, and if it did, it would steer you to the type of restaurants with dishes that the owner says, “you no like.”

MARCY: I think you’re right. I went to one of those restaurants. I ordered something called “zhu chang” and the owner said, “You no like.” I asked what it was and he said, “Pig intestine with ox brain.” And I said, you’re right, I no like! And then he said, “you think you no like? how you think ox felt?” And then I said, “You’ve got a point. Let’s stick to kung pao!”

GPS: Yeah, and if you had kept on with Li-Wen, should wouldn’t direct you to the fork in the road. She would have directed you to the chopsticks in the road. Then, you’d really be in trouble!

MARCY: Yeah, because I don’t know how to use chopsticks.

GPS: Yeah, but Li-Wen could probably hook you up with some training sticks.

SIGNER: Less talk, more signing please.

GPS: I saw that in a fortune cookie once.

SIGNER: Gee, Chantelle, you do seem to know a lot about China for a GPS. Have you been to China?

GPS: Honey, I was born in China. My parents were nine year old kids who didn’t get decent child labor laws for Christmas.

SIGNER: So, you grew up in Peking, not Pittsburg.

MARCY: Gee, I never thought of you as Chinese.

GPS: Well, think again! I grew up in the basement of a electronics chop shop in An-Hui province. I got plenty of love, but my parents were mad at me for not being a boy.

MARCY: Well, couldn’t they have made you into a boy?

GPS: Don’t think they didn’t try! They didn’t have the voice overs to do that, so they were stuck with what they had. And they had to keep me due to the one-child policy.

SIGNER: Well you seem very polite.

GPS: I had to be. My parents said that if I acted up, they would export me.

MARCY: It’s fun talking to you, but honestly, the way you explain the documents isn’t thorough enough. The app literature claimed that you would be a lot more detailed in your instructions.

GPS: Well if you don’t like it, then you can kiss my app!

MARCY: Well, I’m new at this, so I need a little more mentoring.

GPS: Fine. Have it your way. I’m auto-switching you to Charles. You’ll be sorry now.

CHARLES: (British Accent) Hello, this is Charles.

MARCY: Oh, you sound Brittish. So, what’s the next step in this signing?

CHARLES: Well, if you were Queen Latifah, I would courtsey.

MARCY: No, the signing. We just signed the Flood Disclosure.

CHARLES: Well, just sign the other documents and be done with it.

MARCY: Don’t you understand loan signing?

CHARLES: Well, there’s nothing to know actually. You just sign as your name is printed, and that is that!

SIGNER: I don’t know why Marcy opened her big mouth, but we were much better off with Chantel.

CHARLES: This was the way I was programmed.

MARCY: Well, we need more than this, and the app we bought was guaranteed to be thorough in its descriptions of documents.

CHARLES: Well if that’s the way you feel then Cherio. I’m switching you to Li-Wen.

LI-WEN: Ni hao, wo jiao li-wen. Wo zen-me ke-yi bang zhu ni?

MARCY: Do you speak English?

LI-WEN: Sorry, no English.

MARCY: The app said that the voices would be in English.

LI-WEN: Not all of them. 1.3 billion people speak Chinese these day.

MARCY: Well this is not going to work.

LI-WEN: If you no like, then — Honey, you can kiss my app!

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February 15, 2015

Point (1) Deed of Trust; Story: Marcy Becomes a Notary!

Marcy the housewife becomes a Notary!

Marcy was a normal Midwestern housewife. She enjoyed all of the normal aspects of life. She had a small child, her first. She enjoyed the local festivals, corn mazes, county fairs, and married life as well. But, her family seemed to always be behind the eight-ball financially. What was Marcy to do? She tried temping for a while, but that didn’t pan out. Then, she tried being a substitute teacher since she liked kids, but the assignments weren’t regular enough. She had tried all her options and couldn’t think of anything else to do. So, she went next door to Patricia’s house to see if Patricia had any helpful words. Patricia was known in the neighborhood as the go to person if you had a problem. She could help anyone out of any slump and knew the right thing to say in any situation. Marcy picked the wrong day to go to Patricia for help. Of all the days in the year, this was the worst possible day.

Marcy went over and knocked on the door. Patricia answered, but said she was waiting for someone. Then, a nicely dressed guy showed up with a briefcase. What could he be here for thought Marcy? “Oh, this is the mobile notary for my loan documents,” announced Patricia. Marcy said, “Okay, I’ll bother you another time.” Patricia asked her to come back the next day.

Marcy returned the next day. Patricia had only one thing to say: “You could totally do this!” “Do what?” “Be a mobile notary — you’d love it!” “I would?” “Yup!” It is odd how people become mobile notaries. It often happens when they or a friend have a loan that needs to get signed. Then the career opportunity light bulb flashes in their head, and the rest is history.

Marcy marched down to the county recorder’s office, filled out the paperwork, waited a few weeks to get her commission, seal, journal and forms, and she was in business! She was officially a state commissioned Notary Public and a mobile notary because she drove to her appointments. Just one small thing… She didn’t have any appointments. So Marcy went back to Patricia again to ask for help. Patricia suggested calling the notary who had helped them. Maybe he would know how to get work. Except they would be competition for him. Oooh. A touchy subject. Should they call? I guess it couldn’t hurt. In the worst case scenario, he would just decline to help them. After talking to Tom, he recommended calling 123notary and Notary Rotary. Those were the two most reputable sources of notary work at the time. That sounded easy enough. So, Marcy got herself listed on 123notary.com and the calls started coming in. (Obviously Marcy didn’t show up in 2014 because not so many calls came in that year!)

Marcy purchased the 123notary loan signing course. She didn’t study it that hard in the beginning, because she didn’t realize how important the information in it was. She decided to learn the hard way. You’ll see when you read the stories of all the trouble she got herself into.

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Point (1) The Deed of Trust — Quick Facts!

(1) The Deed of Trust is the security instrument. BTW: The term Instrument means document.

(2) The Deed of Trust must be notarized. Make sure you have thumbprints in your journal for any deed.

(3) The Deed of Trust is recorded with the county recorder of the county where the property is located. The people at the County Recorders Office can often be picky and will not tolerate: cross-outs, smudgy or light seal impressions, or incomplete notarizations. Some recorders are pickier than others, so assume that they will all be very picky. If your notarization is rejected by the County Clerk, someone will have to notarize it all over again, and the borrower could experience a costly delay in their loan.

(4) As a general rule, the borrower must sign the Deed of Trust as their name appears on Title. If you use a Signature Affidavit, you might be able to have them sign in a different way, although the loan might be rejected by the Lender, in which case you might have to start all over again after a redraw.

(5) It is often required for the borrower to initial each page of the Deed of Trust

(6) The Deed of Trust is referred to as The Mortgage in many states, which is similar in essence, although there are some legal differences between the two documents which we will not discuss here.

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The Deed of Trust states:

(a) The loan amount

(b) Who the lender is (and their contact information)

(c) Who the borrowers are

(d) The location and description of the property.

(e) When the loan matures (or when the loan expires: e.g., 05-31-2031)

(f) Who the trustors and trustees are

(g) The loan is secured by the property.

(h) A Description of the Property

The Deed of Trust also mentions that the borrower has to pay taxes, principle, interest, late charges, etc. It doesn’t list figures other than the loan amount, but those will be in the note and/or other documents. Deeds of trust usually range from being 2 to 30 pages. Various other terms and explanations are in this instrument, however, those terms are not of much importance to the Signing Agent.

Riders. The Deed of Trust could come with various riders. We will not discuss the riders in this section since they are numerous and self explanitory. There are little check boxes in the Deed of Trust that will indicate which riders would be included.

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You might also like:
30 Point Course Table of Contents
http://blog.123notary.com/?p=14233

Point (2) The Note
http://blog.123notary.com/?p=14270

Deed of Trust (glossary entry)
http://www.123notary.com/deed-of-trust.asp

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January 27, 2015

The Mortgage & The Note

Filed under: (4) Documents,Ken Edelstein — Tags: , , — admin @ 11:41 am

The Mortgage and The Note
These two documents formulate the essence of the home purchase or refinance. The vast number of related documents provide essential and legal information. However, the Note and the Mortgage are really the “action” documents. In their most basic functionality: the note specifies the terms of the loan, the mortgage provides collateral against a default of the Note.

Curiously, the Note typically begins with “In return for a loan that I have received, I promise to pay $XXX,XXX.XX”, but rarely is the Note notarized. It is often initialed on each page by the borrower(s) that are signing the final page. There should be an agreement with the 1003, the Loan Application as to who is technically a borrower. Non-obligors who may be “on title” never sign the note. As the definitive definition of the loan; interest rate and payment terms are generally the second and third items on the first page. These are the items of greatest interest.

Also essential, but rarely initially reviewed, is the Right to Prepay; and what will happen if the borrower fails to pay according to the terms of the Note. Typically, if more than one person signs the Note, each bears the full responsibility for payment. The Note is a negotiable instrument, similar to cash or a bond. They are frequently sold by the initial lender.

Almost all variations of the note include the words “Sign Original Only” on the signature page. As a negotiable instrument is being created, multiple copies of the Note for the same obligation could lead to fraud, confusion, and the borrower(s) being asked to pay each Note! When asked to execute multiple copies of the same Note; shrewd borrowers are careful to add wording to the effect that the duplicate(s) are “file copy” and “not negotiable” next to their signature(s).

The Mortgage, often referred to as the Deed Of Trust, is generally of much greater length compared to the Note. A key provision of the Note grants the Mortgage enforceability. The Note references the related Mortgage: “In addition to the protections given to the Note Holder under this Note, a Mortgage, Deed of Trust … dated the same date as this Note … protects the Note Holder if I do not keep the promises made in this Note”.

Think of the Mortgage as the “enforcement arm” of the Note. The Mortgage contains, in about fifteen pages; the procedures to, typically; take back the property. For notaries the Mortgage often contains a “built in” problem. On the first page of the Mortgage the borrower is “supposed” to be named. However, in lieu of their legal name the “vesting” name often appears. This is not a problem on the first page. But, it does get to be a problem on the last page. For it is there that the computer often uses the “vesting” name in the notary section.

For technical reasons, on the Mortgage vesting often includes “status” terminology such as “husband and wife” or “a single woman” or “a married man” – but **ONLY** the name is permitted in the notary section. Thus, “before me appeared John B Doe a single man” is not permitted per NY State notary laws. I am required to redact (thin line through & my initials) the “a single man” part from the pre-entered value following “before me personally appeared”. Care should also be taken to have John B Doe initial JBD not just JD if his middle initial is on the signature line of the Mortgage. I promise to pay, and, what if I don’t; are the heart of the deal.

Most fail to note (no pun) that there is language in the NOTE that incorporates the Mortgage as “part of the note”

A little mentioned aspect in the “fine print” but O so important.

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Ken’s comprehensive guide to Deeds — Good Deed Bad Deed
http://blog.123notary.com/?p=16285

The Deed of Trust
http://blog.123notary.com/?tag=deed-of-trust

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