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The "Double Agent" Judy Hall, REALTOR®, ABR, REBAC, SRES
RE/MAX All Stars Realty
1225 Roanoke Rd
P. O. Box 39
Daleville, VA 24083
Home Office: 540-473-3066
Text: 540-309-9244
Home Office Fax: 540-473-2814 
Email: judy@judyhall.com
Website: www.JudyHall.com
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Creative Financing

Creative financing: You’ve heard of it, and, as a seller, the idea sounds pretty attractive. But, do you know everything you need to know about carrying back a second; essentially, about becoming a lender? You better know the same things that financial institutions know - you better know about lender’s title insurance.

It’s time to sell your $150,000 home, a home that you have owned for fifteen years, a home in which you have substantial equity. The loan terms call for a $20,000 down payment from your buyer, a new $100,000 loan from a local savings and loan, and for you, the seller, to carry back a note for the remaining $30,000.

Will you, the seller, need title insurance?

Yes, you will. Everyone who retains an interest in the property needs title insurance. When you took on the role of lender, you retained a record title interest which you will want to protect for the term of the loan.

But, why would you need lender’s title insurance when the repayment of your loan is assured by a lien in the form of a recorded deed of trust against the property? What could possibly go wrong?

You must insure yourself for the same reason that financial institutions obtain title insurance - for the protection of your investment. You must be assured that your lien on the property cannot be defeated by a prior lien or other interest in the property, which, if exercised, would wipe out your security.

Anything that involves the new buyer’s ownership rights to the property is of direct interest to you because you are holding the second mortgage. If such ownership rights are in question or defective, you may have trouble collecting your monthly mortgage payments. But, you say, there is nothing in your property’s history that could cause problems: no problems with easements, no problems with boundaries, no problems with rights-of-way.

Contrary to what may be popular belief, these matters are not the only source of title problems; a large proportion of title problems arise out of man’s interaction with man. The fact of a marriage, a divorce, a death, a forgery, a judgment for money damages, a failure to pay state or federal taxes - these occurrences can and usually will affect your rights as a mortgage lender.

As an example of what can befall the lender, did you know that a federal tax lien recorded against your buyer before the loan transaction is concluded may result in the loss of security in your home? Sophisticated mortgage lenders are aware of this possibility as well as many others which could jeopardize their loan security and seek the protection afforded by a lender’s title insurance policy.

If you are considering carrying back a second, be sure to get all the facts regarding the benefits of lender’s title insurance. Your local title insurance company should be happy to provide the information you need.

Article by CLTA

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Testimonials

Judy is very knowledgeable, dependable, and just plain GREAT to work with. I highly recommend her based upon 2 house purchases through her and one house sale with her. Jeanne W.
Could not be happier with the job Judy and Richard did for me! I was so pleased when I bought a house through them, I used them again when I sold my house! Judy Hall Double Agent gets a score of A++++! Wilma K.
Richard and Judy have helped us on both sides of the equation. They helped us on TWO of our home purchases and ONE of our home sales. They helped make the sale of our home in short order at a reasonable price and they helped us settle on a pleasing purchase price for our current home. Both Richard and Judy are superb professionals. Jay R.
Judy has been in the real estate business since 1985 and knows her stuff. If you want an agent who will be there to protect your interests, look no further. She is an "i dotting" and "t crossing" kind of person who will make sure that your contract is binding and will cover everything you have required. In today's market, real estate can be tricky and you need someone who will get the job done, and right the first time. Tam H.
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Each RE/MAX® Office is Independently Owned and Operated.
Licensed in Virginia.
Information Provided by Seller is Deemed Reliable, but Not Guaranteed.

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