Title Types
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M.A.R.I.A.
IS PROPERTY REAL OR PERSONAL:
-Method of Attachment (or Annexation) - How the item is attached to the property (a
... [Show More] window air-conditioner (personal) vs. a central air conditioning unit (appurtenance).
-Adaptability - A microwave oven that is "built in" vs. a microwave that simply sits on a kitchen counter. If an item is well adapted, then it is likely to be considered a fixture.
-Relationship of parties - If a tenant installs a fixture in order to conduct business, the fixture may be considered a trade fixture, which is the tenant's personal property. For example, if you own an ice cream store, and you install freezers to keep the ice cream cold, they are trade fixtures, and you could remove them upon the expiration of a lease. If you do not take them by lease expiration, they become the property of the landlord. Sale or lease contract provisions. In a sale or lease transaction, the listing of an item in the contract as a personal property item or a fixture overrides all other considerations. Unless otherwise stated as exceptions, all fixtures are included in the sale. For example, if a sale contract stipulates that the attached carpeting is not included in the sale, it becomes a personal property item. If the carpeting is not mentioned, it would stay with the property, since it is attached to the floor of the building.
-Intent of the parties - When an owner installs a ceiling fan it is assumed that it is appurtenant to the property and transfers to the buyer. It is important that real estate agents write into the offer (made by the buyer) items that may lead to misunderstandings.
-Agreement between the parties involved as to the nature of the property affixed to the land. If there is a clear agreement, the status of the attached item is not likely to be an issue.
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Deed Types
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Rural Economic and Community Development
(RECD), formerly known as Farmers Home Administration (FmHA) is a federal lender with the U.S. Department of Agriculture that makes loans for home purchases or construction in rural areas and small communities outside metropolitan areas. These areas for direct loans from RECD are defined as having a population of 20,000 or less. In addition to the property location, RECD requires that borrowers demonstrate a limited income record and a need for housing. Loans are either made directly by RECD or made by a private lender with RECD guaranteeing a certain percentage.
FHA 234
for loans on condominiums
FHA 245
Graduated Payment Plan Mortgage
FHA 203K
Allows the purchaser to borrow enough money to rehabilitate a property.
FHA ARM
FHA also has an Adjustable Rate Mortgage Program (ARM).
Qualifying the Buyer
Assessing the buyer's price range depends on three basic factors: stable income (ability to pay loan), net worth (assets - liabilities), and credit history (credit score & mortgage history rating).
Debt Coverage ratio
The ratio of annual income to annual debt service
Qualifying the Property
Type of property (residential, commercial, agricultural)
Location
Area zoning
Value range
Neighborhood
Actual age/Effective age/Remaining economic life
Condition (repairs and predications)
Special clearances (code compliance, well and septic certifications etc.)
Overall marketability
Qualifying the Title
-Abstract and opinion
-Chain of Title
Abstract and opinion
A full summary of all consecutive grants, conveyances, wills, records, and judicial proceedings affecting title to a specific parcel of real estate, together with a statement of all recorded liens and encumbrances affecting the property and their present status. The abstract of title does not guarantee or ensure the validity of the title of the property. It is a condensed history that merely discloses those items about the property that are of public record. It does not reveal such things as encroachments and forgeries. Therefore, the abstracter is usually liable only for damages caused by his or her negligence in searching the public records.
Chain of Title
The recorded history of matters that affect the title to a specific parcel of real estate, such as ownership, encumbrances, and liens, usually beginning with the original recorded source of the title. The chain of title shows the successive changes of ownership, each one linked to the next so that a "chain" is formed.
Title insurance
A comprehensive indemnity contract under which a title insurance company warrants to make good a loss arising through defects in title to real estate or any liens or encumbrances thereon. Title insurance protects a policyholder against loss from some occurrence that has already happened, such as a forged deed somewhere in the chain of title.
Underwriter
Person working for a lender who reviews a loan application and makes recommendations to the loan committee based on all of the issues we have discussed in this unit of the course.
NON-RECOURSE LOAN
A loan in which the borrower is not held personally liable on the note. The lender of a non-recourse loan generally feels confident that the property used as collateral will be adequate security for the loan.
NON-RECOURSE CLAUSE
Real estate loans are often sold in the financial market. When a non-recourse clause is included in the sale's agreement, the seller of the security is not liable if the borrower defaults.
DEFAULT
The non-performance of a duty or obligation that is part of a contract. The most common occurrence of default on the part of a buyer or lessee is nonpayment of money when due. A default is normally a breach of contract, and the non-defaulting party can seek legal remedies to recover any loss. A buyer's good faith inability to obtain financing under a contingency provision of a purchase agreement is not considered a default (The performance of the contract depends on the buyer getting the property financed.), and in this case the seller must return the buyer's deposit. [Show Less]