Business Hints for Men and Women Part 2

OTHER FORMS OF DEEDS--MORTGAGES

There is one condition under which the grantor does not turn over or deliver the deed to the grantee after it is made. This is known as a Deed in Escrow.

A deed "delivered in escrow" is when the doc.u.ment is placed with a third party to be by him delivered to the grantee when a certain time has elapsed or certain conditions have been fulfilled.

When the conditions have been complied with, the deed is given by its custodian to the grantee, which is as legal as if it were given by the grantor in person.

TRUST DEEDS

A trust deed is the form used to convey property to some person who is ent.i.tled to its proceeds or profits.

This form of deed is often used to secure the payment of a debt.

In some states they take the place of mortgages.

Where the trust deed is meant to take the place of a mortgage to secure a debt payment, the property is deeded to a third party known as a "trustee."

The trustee in this case is the agent for debtor and creditor, and he must act impartially.

The trust deed specifies the character of the debt to be secured.

In case of failure to pay the debt as agreed on, the trustee may, if so warranted, sell the property, and pay the obligation from the proceeds.

The grantor in a trust deed, if not stipulated to the contrary, is ent.i.tled to all the rents and profits of the property; for it remains virtually his, until he has failed to fill his contract.

When the indebtedness secured by the trust deed has been paid, the trustee must at once execute a paper known to law as a Release Deed. When recorded this instrument discharges the lien.

AS TO MORTGAGES

Mortgages are of two kinds, real and chattel. The first is a lien on real estate, the second on personal property.

A mortgage may be defined as a conveyance of property, personal or real, as security for the payment of a debt, or it may be given as a guarantee for the performance of some particular duty.

MORTGAGE FORMS

When a mortgage is given as security for the payment of a debt, the rule is to give a note for the payment of the amount involved.

The mortgage becomes in this case the security for the note's payment.

In the body of the note it must be stated that it is secured by mortgage.

The date of the note and mortgage should be the same.

The man who mortgages his property is the mortgagor.

The man to whom the mortgage is given is the mortgagee.

The form of the mortgage is the same as that of a deed, except that it contains a clause called the Defeasance, which states that when the obligation has been met the doc.u.ment shall be void.

MORTGAGES MUST BE RECORDED

The forms for "signing, sealing and delivering" a mortgage, are the same as with a deed.

A mortgage must be recorded the same as a deed, the mortgagee paying the fees.

Chattel mortgages are filed and recorded in the same way, except that it is not usual to make copies of the instrument. They are described in books prepared for the purpose.

A wife need not join her husband in making the note secured by a mortgage, but if she agrees to the transaction it is necessary for her to sign the mortgage; however, some states do not require this.

PAYMENTS

Often a life insurance policy is used as security for the payment of a mortgage.

The mortgagee, if there be buildings on the property, should see that the buildings are insured and that the policy or policies are made out in his name.

If the insurance policy is in the mortgagor's name he may collect and keep the insurance money.

The mortgagor must meet, as stipulated, every payment of the princ.i.p.al and interest.

Failure to meet one payment can result in a legal foreclosure.

When a payment is made, the date and the amount must be entered on the back of the note. This should be done in the presence of the mortgagor.

If possible always pay the obligation by check.

If a payment is accepted on a mortgage and the amount is not sufficient to meet the sum required, the interest is first settled in full, the rest is credited to the princ.i.p.al.

When the full amount, with interest, is paid in, it becomes the duty of the mortgagee to have the mortgage "discharged."

A complete settlement is when, all payments being made, the mortgagee surrenders the note and its security, and causes to be written by the register, on the margin of the copy in his books, the words, "discharged," or "satisfied," affixing thereto his official signature and the date.

a.s.sIGNMENTS

A mortgage is regarded in law as personal property.

A mortgage need not remain in the hands of the mortgagee in order to be valid. It can be sold like bonds, stocks or other property, and there are men who deal only in that form of security.

In order to sell a mortgage, the owner must make, to the purchaser, what is known as an "a.s.signment of mortgage."

The a.s.signment should be recorded in the same way as the original mortgage, the a.s.signee paying the fee.

REDEMPTION OF MORTGAGES

While the rule as to the redemption of mortgages remains the same in some localities that it formerly was, the law in most places is now more lenient.

Now the mortgagor who has failed is usually given by law an extension of time in which to make good the payment of princ.i.p.al and interest.

Lenders, when the interest is met, are content to let the mortgage run on as an investment, though it will often be found, in such cases, that it is better to make a new mortgage.

EQUITY OF REDEMPTION