Mortgage or Deed of Trust??? - Posted by tim


#1

Posted by Rob FL on November 14, 1998 at 12:50:54:

Some states do specifically recognize “land trusts”. The most obvious is Illinois, hence the name “Illinois Land Trust”. In Florida there is also a specific land trust statute (patterned after Illinois) that gives specific laws in order to protect the privacy of real estate investors through land trusts. I am sure some of the other states have similar laws.


#2

Mortgage or Deed of Trust??? - Posted by tim

Posted by tim on November 13, 1998 at 07:24:42:

What is the difference between a mortgage and a deed of trust??? Could someone please explain???

Thanks


#3

Re: Mortgage or Deed of Trust??? - Posted by Otis

Posted by Otis on November 13, 1998 at 09:45:17:

Roughly speaking,a mortgage and a deed of trust are liens on a piece of property. A mortgage is an instrument(piece of paper) that secures a debt or obligation with a piece of property. If the borrower is unable to make payments, they forfeit the property.
In a deed of trust(another piece of paper)a third party,called a trustee(read title company)is given title by the borrower to the property and has responsibilty to the lender to effect a sale on default of the loan.


#4

Re: Mortgage or Deed of Trust??? - Posted by Doris E. Shanks

Posted by Doris E. Shanks on November 13, 1998 at 18:03:59:

Hi Otis - I forgot to ask you one more question? What is the definition of a Land Trust and how does it differ from a Deed of Trust or even a Lease/Option. I may be doing my first deal soon and when I outlined my plan of no payments for a few months until I got a tenant/buyer - she immediately said Oh-you mean a Land Contract. Her father holds the mortgage note so no official lender is involved. I really was confused but didn’t let on. I would appreciate you help. Thanks Doris.


#5

Re: Mortgage or Deed of Trust??? - Posted by Doris E. Shanks

Posted by Doris E. Shanks on November 13, 1998 at 17:56:53:

Otis - I follow your very clear explanation of a mortgage but on the Deed of Trust you lost me. I didn’t know a third party was involved but can see it may be for legal reasons. I have friends who hold Deeds of Trust on their properties and when the payments stop coming and action has to be taken-they just reassume ownership of the property and resell it. What am I missing in this picture?? I am a newby and still trying to learn. Thanks Doris…


#6

Re: Mortgage or Deed of Trust??? - Posted by Irwin

Posted by Irwin on November 14, 1998 at 07:47:24:

There is no such thing as a “land trust” IMHO. But there is such a thing as a trust that owns land, the same trust might also own stocks, bonds, antiques etc… In other words, it’s a trust period. A “land contract” is the sale/purchase of land on the installment plan. A lease/option is a rental agreement with a clause that gives the tenant the right to buy the property at a fixed price for a certain fixed period of time.

Most states are either lien theory states and use mortgages, or title theory states and use deeds of trust for real estate lending. I’m not sure if there are any states that recognize both forms.