Escrow Accounts for Taxes and Insurance

Escrow Accounts for Taxes and Insurance

Escrow Accounts for Taxes and Insurance

The material above suggests that mortgagees have a strong and legitimate concern that their mortgagors maintain and pay the premiums for casualty insurance on the mortgaged premises. Mortgagees are perhaps even more insistent that mortgagors promptly pay the real estate taxes and special assessments accruing against the property. The reason for this concern, as Professor Durfee once aptly pointed out, is that “in most tax systems the burden of the ordinary tax on land and the burden of special assessments for local improvements rest on both mortgagor and mortgagee in the sense that unless these charges are satisfied by someone before the axe falls, the interests of both parties will be rubbed out. The state goes after the land and its claim overrides all prior interest whatever their character.” Durfee, Cases on Security, p. 136 (1951) (emphasis added). In other words, a “first” mortgage on real estate will be wiped out by a sale under a subsequently a rising real estate tax lien for more information click here.

Thus, mortgages generally utilize mortgage clauses specifically imposing the duty to pay taxes and insurance premium on the mortgagor and making failure to so pay a cause for acceleration of the mortgage debt. As additional protection, many mortgagees demand that mortgagors set up accounts with the mortgagee into which the mortgagor will pay 1/12 of the annual taxes and insurance premiums each month (along with the regular monthly payment of principal and interest), and out of which the mortgagee will actually make the tax and insurance payments as they fall due. These accounts are usually termed “escrow,” “impound,” or reserve” accounts. The usual obligations paid out of escrow accounts are ad valorem property taxes, special assessments, and casualty insurance premium. Sometimes other items are included, such as condominium or PUD homeowner association assessments and ground rents if the security property is ground leased land. Use of escrow accounts ensures that the mortgagor will “save enough money to pay the escrowed items, and provides the lender with and “early warning system;” as soon as the mortgagor misses even one monthly payment, the lender is immediately aware of the default and can take measures to protect itself.

Escrow accounts are also an important source of revenue for lenders. If the mortgagee is not required to pay interest on the account to the mortgagor, it can invest the funds on hand and earn interest on them for its own benefit until they need to be paid out read more here.

Discharge of The Debt and Mortgage

Loans and Finance

Discharge of The Debt and Mortgage

Everyone recognizes instinctively that when a borrower pays off the mortgage debt in full, the mortgage itself is extinguished. The popular mythology of the borrower “burning the mortgage” reflects this basic concept. The concept is indeed correct, but it is a bit more complex and requires some further explanation read more.

To being with, a mortgage may be paid off by either of two classes of persons: those who are “primarily responsible” for paying it and those who are not. Who is “primarily responsible?” the concept is not dependent on the existence of personal liability on the debt. Most obviously, the mortgagor is “primarily responsible” if he or she still owns the real estate, whether the debt is recourse or not. Likewise, if the real estate is sold, the grantee becomes “primarily responsible,” whether the grantee assumed personal liability on the debt or not. Even a tenant in common, a life tenant, or other holder of a limited interest in the real estate is “primarily responsible” except to the extent that someone else has a duty to reimburse him or her for part of the payment he or she might make.

If a complete payoff of the loan (including any validly accrued interest, prepayment fees, and other miscellaneous items) is made by somebody who is “primarily responsible,” the mortgage is indeed extinguished. Legally, it doesn’t exist anymore. Of course, that doesn’t make it disappear from the public records. Hence, the mortgagee has a duty to provide a suitable document, recordable in form, showing that the mortgage has been released. The person marking the payoff can then records it clear the records. We can correctly refer to the payoff as “redemption” of the land from the mortgage.

Incidentally, the great majority of states have statutes that formalize the mortgagee’s duty to provide a recordable document discharging the mortgage. The name customarily given to the document varies from one jurisdiction to another; it may be called a release, a satisfaction piece, a discharge, or (particularly where deeds of trust are commonly used) a re-conveyance. The name has little significance. Theses statutes often provide a fixed time period (e.g., 10 to 90 days) within which the lender must provide the document of discharge. Many of them impose financial penalties on lenders who fail to comply, and, in addition, allow the payer to recover any actual damages resulting from the lender’s failure to provide a discharge from a title loan Atlanta.

Disbursement of Foreclosure Sale Proceeds

Disbursement of Foreclosure Sale Proceeds

Disbursement of Foreclosure Sale Proceeds

Where the foreclosure sale produces a surplus, the rules governing who participates in that surplus and the priority of that participation are generally clear. Statutes often regulate the distribution of the surplus, especially in the power of sale setting. Some simply codify the principles described a car title loan in Atlanta, others seen their face to give the surplus to the mortgagor and make no reference to the rights of junior lienors. However, these latter statutes have generally been interpreted to give junior lienors right in the surplus and the priority over mortgagors generally described in the preceding paragraph. A few statutes make no mention of priorities, but simple authorize the mortgagee or trustee to pay the surplus to the clerk of court.

Suppose that for some reason a senior lien has been foreclosed and a surplus was produced, but a junior lien exist that is not in default. Should that junior lioner be entitled to pay from the surplus? Some courts have said yes. On the other hand, in re Castillian Apartments is an interesting case in this regard, in that case, a senior mortgage was foreclosed and produced a substantial surplus. The junior mortgage was not in default and contained no acceleration clause that would have made it due and payable whenever the senior mortgage went into default. Moreover, because the junior debt had previously been determined to be usurious, under North Carolina law all right to receive interest on it was forfeited. As a result, the North Carolina Supreme Court approved a lower court determination that the surplus should not be paid to the junior lienor and that it instead should be invested in a certificate of deposit for junior lienor’s benefit but with interest to be paid to the debtor.

The foregoing situation is relatively uncommon for several reasons. First, when foreclosures sale result in a surplus, the debts of junior lien claimants normally will be in default. This will be true automatically with respect to junior judgment lionors. Moreover, if the mortgagor has allowed senior debt to go into default, the chances are strong that the junior debt is in default as well. Second, even if the mortgagor has not otherwise default on senior debt, many junior mortgages provide a ground for acceleration that any default or foreclosure with respect to a senior encumbrance will give the junior mortgagee the option to accelerate the junior debt. Acceleration for such a reason is generally upheld. Finally, a few states appear to give junior lienors that are not default the right to be paid from a foreclosure surplus at the car title loan in Atlanta.

Mortgage Financing Tips

The amount of the regular payments necessary to amortize a title loan in Atlanta over a given period of time depends on several factors: the frequency of payments (usually monthly for mortgage loans), the terms or period of repayments, the interest rate, and the amount borrowed. The table below shows the monthly payments for each one thousand dollars borrowed at various interest rates and terms. You can apply the table to any principal amount simply by multiplying the factor shown by the number of thousands of dollars borrowed.

Term of Loan

Interest Rate    20 Years        30 Years         40 Years

6%                      7.16                  6.00                  5.50

7%                      7.75                  6.65                  6.21

8%                      8.36                  7.34                 6.95

9%                      9.00                  8.05                 7.71

10%                    9.65                   8.78                 8.49

11%                   10.32                   9.52                 9.28

12%                   11.01                   10.29              10.08

13%                   11.72                   11.06               10.90

14%                   12.44                  11.85                11.71

15%                    13.17                  12.64               12.53

16%                    13.91                 13.45               13.36

17%                    14.67                 14.26               14.18

18%                    15.43                15.07                15.01

Several observations can be made the level-payment fully-amortized loan. The principal balance declines very slowly during the early years. After five years of regular payments on the loan in the foregoing example, the principal would be reduced to $95.880, a reduction of only $4120. Since principal amortization is in a sense a form of forced savings, some households might prefer to minimize, or even eliminate entirely, the amortization component. If the owner wishes to resell the house after five years, it will probably be easier for a prospective buyer to “take over” the loan if balance is still quite high. On the other hand, the lender will generally prefer a relatively more rapid reduction in principal, since the loan is seen as a safer investment if this occurs.

Each monthly payment is partly allocated to interest and partly to principal. These allocations change over time.

The level-payment fully-amortized loan is very widely used in single-family home financing, and quite commonly employed with commercial and industrial property as well. However, beginning in the late 1970’s, both federal and state regulators of lending institutions began to permit loans.  For example, adjustable rate mortgages (ARMs) permit modification of the interest rate during the life of the loan (with concomitant changes in maturity or monthly payment).  They have become popular among lenders, who are seeking relief from the financial stress they have experienced as a result of holding portfolios of fixed-rate mortgages during recent periods of rapid fluctuation in their cost of funds for title loans in Atlanta.

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Land Descriptions

Land Descriptions

Land Descriptions

Land is fixed in place so if it is to be divided among various people, it must be marked by monuments where they exist or directions must be given explaining how it is or can be a monument to designate a car title loans Atlanta location. The earliest land holding were dependent upon found or set monuments that delineated limits of ownership. But monuments and marks on the earth’s surface are subject to destruction or movement by intentional or unintentional means. Trees die, wooden stakes rot, rivers change their course, and ploughs remove stakes. Certainty of boundary lines dependent upon monuments may be destroyed with the destruction of the monuments marking them. To cope with the problem of replacing lost or destroyed monuments, especially in the Nile valley of Egypt where frequent floods destroyed many land markets, man invented measuring methods that would enable him to reset new monuments reasonably close to the spot occupied by the old monuments. Measurements start from some definite point, a monument, and go a fixed distance in a given direction. By relating numerous monuments to one another by measurements, a lost monument can be replaced by distance and direction from other monuments.

Land ownership have shape, size, and location. The shape and size of a parcel of land may be defined without the aid of monuments, i.e., a square, a parallelogram, a circle, or an irregular parcel by bearings and distances. But the place where the particular shape is located is related to a fixed monument on the face of the earth. Theoretically the position of land can be defined by latitude and longitude without the aid of monuments, but, because of technical difficulties in pinpointing a particular latitude and longitude, it is rarely done. All the advancements in land location technique have not eliminated the monument as the ultimate means by which land is controlled.

In the early days in the United States free surveys often existed. A surveyor could start at any point, survey a selected quantity of land, monument, and describe it. He was not limited by previous ownership or previous surveys. Today practically all boundary surveys are dependent partly or wholly upon monuments or points previously established on the earth. If a new parcel is described, it is related to existing boundaries which in turn are related somehow to a fixed monument. If a new parcel is established by survey, it is done by measurements from fixed monuments. Monuments are the backbone in relation to where land is located and help direct you to the nearest location for car title loans Atlanta.

Boundary Control and Legal Principles

Types of meters and bounds conveyances

Several types of Atlanta car title loans and bounds descriptions exist, some being so closely related to subdivision descriptions that they could be considered as a quasi-subdivision description.

Described by Successive Bounds

In the most common metes and bounds description, and the one normally considered to by the true metes and bounds description, all the bounds are described in successive order, the bounds being fixed by reference to a map or document, by bearing and distance, by monuments, or by all three. The purpose of any convey, by written language, a parcel of land of the exact shape, size, and location offered for sale by the grantor. Although it is desirable to use as short a description as possible, it is often necessary, when a clear intent is expressed, to use many words describing each bound. All too often a shot description can alter the meaning of a deed, and a long description written by an unskilled person frequently shows conflicts among the terms of a deed. The following quasi-metes and bounds descriptions are discussed along with true metes and bounds descriptions.

Scrip Conveyances and Stationing

Describing a road easement or right of way by a strip deed, the form “A right of way for road purposes over and across a strip of land lying 30 feet on each side of the following describe d center line:” is used. Generally the stationing system, that of starting from an arbitrary point called and assigning each point on the line a station that is dependent upon its distance from the starting point, is employed. If a point is 1,327.62 feet from the arbitrary starting point, said distance being measured along the center line of the strip, the station is 13+27.62. Every 100 feet along the center line, be it on a curve or angel, is an even station; the plus number is the added distance beyond the station. The stationing system was devised for the convenience of the surveyor in note keeping and map notations. Any object along a right of way, such as power pole, may be located by a simple note.

Conveyed by Division Line

A portion of lot divided by a road or a natural monument is described precisely and simply by the form “all of lot 12 lying northerly of U.S.  Highway 80 as it now exists” or “all of lot 12 lying southerly of Boulder Creek.” Longer descriptions result from the usage of the form “all of lot 12 lying northerly of the flowing described line.” The bearing and distance description of the line following the general statement requires many more words that the two simplified example above.

Land Conveyed by Distance

The shortest quasi-metes and bounds deed is of the type “the easterly 50 feet of lot 2.” The junior deed, “all except the easterly 50 feet of lot 2,” is for the remainder of the lot. This type of deed is easy to write, but it may be misinterpreted by the parties of the deed, since the 50 feet is measured so as to give the senior deed (the buyer) the maximum area whereas the junior deed has the remainder of the area of  the land for locations of Atlanta car title loans.

The Statute of Frauds and Part Performance

The Statute of Frauds

The Statute of Frauds

No law says the parties must have a contract at all or an Atlanta title pawn is null and void. If P is merrily walking down the street one day, spots V’s house with a “For Sale” sign in the front yard, and decides she would like to buy it, she can simple knock on V’s door and begin haggling with him about the price. If they can agree, P come pull out her checkbook and write V a check, in return for which V can write a deed to the property (the bank of an old envelope will do) and immediately hand it to P. Presto, the transaction is completed! Even here a purist might argue that there was an (oral) executor contract of sale for a few brief moments, but if so it was an executor contract of sale for a few brief moments, but if so it was an exceedingly ephemeral and unimportant one.

In real life things seldom happen this way. Instead there is usually a rather detailed written agreement of sale, often filled in on a printed form. Considerable time say 30 to 90 days or more commonly passes between the contract’s execution and its performance by a deed to her.

Why the delay, and why the need for a detailed contract? Two reasons stand out at Atlanta title pawn:

  1. P wants to be certain that V really owns the property, and that V’s title is “good” or “clear” or marketable.”  This determination takes time and money, and P does not want to go to the trouble unless she is confident that V is committed to completing the sale at the agreed price.
  2. P need to borrow part (usually most) of the money needed to buy the house. Again, obtaining a loan involves time, trouble, and considers P’s application for a loan unless she has a signed contract of purchase.

 

These are the two most pervasive reasons a contract and an “executor period” are needed. You may be able to think of many more. Here are a few possibilities:

  1. P needs time to sell her previous house or terminate her existing lease and to arrange to move her personal effects.
  2. V needs time to find another home and to arrange to buy or rent it.
  3. P is concerned about the physical condition of the house the roof, plumbing, furnace etc. and wants an expert to inspect them and report it, since she will live close to a semi truck title loans.