real estate finance - full book (500 pgs)

A title policy may not be secured on the property

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Unformatted text preview: rs, carpet, heating, and air conditioning. One reason to include such easily removed items in a deed of trust is that the lender is better able to protect the investment. The property is more sellable with these items in place. An important advantage for the borrower is that he or she can include the cost of these items in the deed of trust and, therefore, be able to budget their cost. This instrument is frequently used by institutions licensed as personal property brokers, such as finance companies. A loan used in home financing that is secured by a combination of real property, improvements, movable equipment and/or appliances. OPEN–END TRUST DEED As the name implies, the open–end deed of trust has no due date. The balance is usually not paid off and can be as little as one dollar. Thus, the mortgage is still alive and the lender can lend funds without having to start the procedures of a new loan; the collateral for the original loan is still used for the new funds. This type of loan is used primarily to finance agriculture in rural areas, where the lenders are quite familiar with Dynasty School (www.dynastySchool.com) 9-41 REAL ESTATE FINANCE the borrowers and their financial capabilities. It has some use in today's real estate market. Additionally, certain deeds of trust with stated maturities have open–end provisions which allow for additional advances during the life of the trust. An open–end trust deed allows additional amounts of money to be lent to borrower in the future under the same terms and conditions as the existing trust deed. BLANKET TRUST DEED (WITH RELEASE CLAUSE) A blanket deed of trust with release clause is normally used for financing the purchase and development of land or subdivisions. Under the blanket deed of trust, the developer has the opportunity to include more than one piece of property, usually subdivision lots, with the ability to release a lot from the mortgage as it is sold. This means, for example, if a developer has a subdivision with 100 lots financ...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.

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