My mortgagor wants to sell a slice of the land. Thoughts?

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chevca
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by chevca » Sun Aug 11, 2019 10:07 am

Sounds fair to me. Really, this mortgagor is just the middle man between you the owner and the buyer.

Have you talked to a title company about this yet? I'm guessing you would like to handle it all yourself since you did the owner finance part and all. But, a title company might be able to handle the whole deal for y'all from A to Z.

If this buyer is a 10+ year friend, you could ask them "why" as well. It doesn't sound like there's any bad blood anywhere in the deal, so it should be easy to come to some agreement. Maybe a 3-way split of the title company costs?

Unless, as you say, the mortgagor needs some quick cash and saw this as an easy way to get it. But, it should not work that way. The cash for the land should never touch their bank account. IMO, but I am no expert on this nor a lawyer.

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galving
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by galving » Sun Aug 11, 2019 10:21 am

I have a rule that I don't sell what I don't own. . . (Admittedly this might be unsophisticated though its worked so far.)
Bottom line is that I'd apply that rule and just say no until the mortgage is paid in full.

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astrohip
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by astrohip » Sun Aug 11, 2019 10:30 am

chevca wrote:
Sun Aug 11, 2019 10:07 am
Sounds fair to me. Really, this mortgagor is just the middle man between you the owner and the buyer.

Have you talked to a title company about this yet? I'm guessing you would like to handle it all yourself since you did the owner finance part and all. But, a title company might be able to handle the whole deal for y'all from A to Z.

If this buyer is a 10+ year friend, you could ask them "why" as well. It doesn't sound like there's any bad blood anywhere in the deal, so it should be easy to come to some agreement. Maybe a 3-way split of the title company costs?

Unless, as you say, the mortgagor needs some quick cash and saw this as an easy way to get it. But, it should not work that way. The cash for the land should never touch their bank account. IMO, but I am no expert on this nor a lawyer.
I haven't heard back from them, since I gave them their two options. I think I threw them off what they thought was an easy sale and quick cash. And I'm staying out of it until necessary. My one and only reply to them was shorter than this reply. :wink: To elaborate, I didn't get into costs, new surveys, lawyers, or anything else. I just said "You can take the money from the proceeds, and apply it against the outstanding principal balance." No need to get into details until I hear what they want to do.

No 3-way split of anything. I have no intention of picking up any costs involved in this potential transaction.

Until I hear back, it's just random speculation at this point.
"Happiness is not about doing, it’s about being." - R Branson

michaeljc70
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Re: My mortgagee wants to sell a slice of the land. Thoughts?

Post by michaeljc70 » Sun Aug 11, 2019 10:35 am

HomeStretch wrote:
Sat Aug 10, 2019 11:34 am

You said the sale would affect the value by 3-5% of the land which is collateral for the mortgage. As part of the transaction, if the mortgagor doesn’t refinance with another lender, I would want all my expenses paid by mortgagor and at least 5% of the proceeds paid to me to reflect this. I would also want to know the proposed use of the land being sold in case it was something that could detract from the value of the remaining property.
+1

AlphaLess
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Re: My mortgagee wants to sell a slice of the land. Thoughts?

Post by AlphaLess » Sun Aug 11, 2019 12:18 pm

astrohip wrote:
Sun Aug 11, 2019 9:38 am
AlphaLess wrote:
Sun Aug 11, 2019 12:01 am
Bingo! We have a winner.

If you think that:
- you have the time,
- the experience,
- the data,
- and all

To compete with the banks, then good luck.
You're over-complicating this.

Time? I get a check once a month. Post it to an Excel spreadsheet I found online, and to my Quicken account (and of course, deposit it). Once a year, I send them the interest info for their tax return (NOTE that for owner financed mortgages, you don't even have to do a 1098; you just put it on both parties returns.) Boom! That's my entire time spent.

"Experience, data and all"? Sure whatever.

If I was out there making mortgage loans to third-parties, then your points could be valid. An owner-financed sale from a financially astute seller... not an issue.
Typical response. You spent all this time figuring out what to do with this 'pocket sale' of parcel by your client, but you only include the time that is conveniently little.
"You can get more with a kind word and a gun than with just a kind word." George Washington

Dave55
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Re: My mortgagee wants to sell a slice of the land. Thoughts?

Post by Dave55 » Sun Aug 11, 2019 12:26 pm

I've offered them two options: Sell it and give me 100% of the proceeds, applied to their balance, or go out and refi and pay me off. I'm happy either way. IAC, they'll pay 100% of all costs, legal et al.


agree with you 110%

Dave

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astrohip
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Re: My mortgagee wants to sell a slice of the land. Thoughts?

Post by astrohip » Sun Aug 11, 2019 12:46 pm

AlphaLess wrote:
Sun Aug 11, 2019 12:18 pm
Typical response. You spent all this time figuring out what to do with this 'pocket sale' of parcel by your client, but you only include the time that is conveniently little.
Sure. Consider it ancillary time spent to help make a smart decision.

Plus, I learned I've been mixing mortgagee and mortgagor all these years. So I'm officially transferring this time from mortgage expenses to educational expenses. :beer
"Happiness is not about doing, it’s about being." - R Branson

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J G Bankerton
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Re: My mortgagee wants to sell a slice of the land. Thoughts?

Post by J G Bankerton » Sun Aug 11, 2019 1:47 pm

astrohip wrote:
Sun Aug 11, 2019 12:46 pm
AlphaLess wrote:
Sun Aug 11, 2019 12:18 pm
Typical response. You spent all this time figuring out what to do with this 'pocket sale' of parcel by your client, but you only include the time that is conveniently little.
Sure. Consider it ancillary time spent to help make a smart decision.

Plus, I learned I've been mixing mortgagee and mortgagor all these years. So I'm officially transferring this time from mortgage expenses to educational expenses. :beer
An easy way to remember "or" is a vendor or offeror is the one who sells or transfers.

AlphaLess
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Re: My mortgagee wants to sell a slice of the land. Thoughts?

Post by AlphaLess » Sun Aug 11, 2019 1:59 pm

astrohip wrote:
Sun Aug 11, 2019 12:46 pm
AlphaLess wrote:
Sun Aug 11, 2019 12:18 pm
Typical response. You spent all this time figuring out what to do with this 'pocket sale' of parcel by your client, but you only include the time that is conveniently little.
Sure. Consider it ancillary time spent to help make a smart decision.

Plus, I learned I've been mixing mortgagee and mortgagor all these years. So I'm officially transferring this time from mortgage expenses to educational expenses. :beer
Sounds good. There is no tuition for today's class.
Tomorrow is a different day.
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AZAttorney11
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by AZAttorney11 » Sun Aug 11, 2019 7:14 pm

miamivice wrote:
Sat Aug 10, 2019 10:44 pm
I am not so sure that the OP has the amount of veto power he thinks he has.

Sure, if he takes the borrower to court, I am sure he can force his way. No questions there.

However, the borrower can record a short plat and transfer of title without involving the OP, no problem. Just write up the appropriate documents, take them to the county recorder, and record them.

What about the title company referenced above? Nothing says that a title company has to be involved in a transfer. In fact, I have transferred properties before without using a title company.

It may not be a "legal" transfer or an "above and aboard" transfer, but there is nothing stopping the borrower from doing what he wants, excepts the threat of a lawsuit.
This is wrong on multiple levels. This drivel should be disregarded in its entirety by those who have read it.

Bacchus01
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by Bacchus01 » Sun Aug 11, 2019 7:28 pm

AZAttorney11 wrote:
Sun Aug 11, 2019 7:14 pm
miamivice wrote:
Sat Aug 10, 2019 10:44 pm
I am not so sure that the OP has the amount of veto power he thinks he has.

Sure, if he takes the borrower to court, I am sure he can force his way. No questions there.

However, the borrower can record a short plat and transfer of title without involving the OP, no problem. Just write up the appropriate documents, take them to the county recorder, and record them.

What about the title company referenced above? Nothing says that a title company has to be involved in a transfer. In fact, I have transferred properties before without using a title company.

It may not be a "legal" transfer or an "above and aboard" transfer, but there is nothing stopping the borrower from doing what he wants, excepts the threat of a lawsuit.
This is wrong on multiple levels. This drivel should be disregarded in its entirety by those who have read it.
Drivel might be a little harsh, but in fact it is almost completely wrong.

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ResearchMed
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by ResearchMed » Sun Aug 11, 2019 8:07 pm

astrohip wrote:
Sat Aug 10, 2019 10:59 am
Gill wrote:
Sat Aug 10, 2019 10:41 am
Just to clarify - you are the mortgagee. The other party is the mortgagor.
Gill
<snip>

I've decided to offer them two options: Apply the proceeds against the current balance, or refinance.
If these are the only two choices for them - which I agree is the right thing for *you* to do - "what's in it for them" with the first choice, giving you the money/applying it towards the balance?
At best, they'd be saving a very small percentage of the interest, but why bother for such a small part?

They themselves aren't getting any current/usable money for the transaction, as that goes to you toward the balance.
They are simply "losing" some of "their" (so-called, at this stage) land.

It just seems like a bad deal for you, given the sketchy nature of the request, at least in my mind.

Did you give them a particularly low interest rate, such that refinancing isn't advantageous to them? (And I'm not sure how a full refi helps them in this case, unless they are selling that small section off as part of the refi?)

RM
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J G Bankerton
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by J G Bankerton » Sun Aug 11, 2019 8:48 pm

ResearchMed wrote:
Sun Aug 11, 2019 8:07 pm
Did you give them a particularly low interest rate, such that refinancing isn't advantageous to them? (And I'm not sure how a full refi helps them in this case, unless they are selling that small section off as part of the refi?)
Refinancing may not help, they would have to get the bank to agree to let them sell some land after the refinance. This is a sticky situation and personal.

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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by Lalamimi » Sun Aug 11, 2019 8:55 pm

the new deed would have to be made subject to your Deed of Trust and if assignable, buyer could owe you for the % due on the 2 or so acres. But I would request that they pay you value for that acreage and have a new deed of trust prepared covering the 30 acres, less and except the parcel sold.

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ResearchMed
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by ResearchMed » Sun Aug 11, 2019 8:55 pm

J G Bankerton wrote:
Sun Aug 11, 2019 8:48 pm
ResearchMed wrote:
Sun Aug 11, 2019 8:07 pm
Did you give them a particularly low interest rate, such that refinancing isn't advantageous to them? (And I'm not sure how a full refi helps them in this case, unless they are selling that small section off as part of the refi?)
Refinancing may not help, they would have to get the bank to agree to let them sell some land after the refinance. This is a sticky situation and personal.
Right, that's why I mentioned having it included as part of the refi. Otherwise, they are back to the same *except* they are dealing with a commercial lender who *might* have procedures in place for something like this. OTOH, they may not be at all flexible, period! Minimally, it would be complicated (= expensive if even possible), perhaps involving several different ways of assessing the total and the parts, etc.

I still don't see what the borrower/buyer expects to gain IF this is arranged as an "all proceeds to the lender".

RM
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astrohip
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by astrohip » Sun Aug 11, 2019 9:14 pm

ResearchMed wrote:
Sun Aug 11, 2019 8:55 pm
I still don't see what the borrower/buyer expects to gain IF this is arranged as an "all proceeds to the lender".
As I mentioned above, my option makes this hardly worthwhile to them. After expenses, they will barely have a modest amount to apply against the balance.

I think they thought they could sell the slice, keep the money, with no other effort or expenses necessary. It's a small piece of land that won't affect them at all, so no issue there. And they would get a few thousand in their pockets.

I put the kibosh on that. :twisted:
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J G Bankerton
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by J G Bankerton » Sun Aug 11, 2019 9:23 pm

ResearchMed wrote:
Sun Aug 11, 2019 8:55 pm
I still don't see what the borrower/buyer expects to gain IF this is arranged as an "all proceeds to the lender".
The borrower would pay off some of their debt and be a good neighbor. The more I think about it I don't see how this can go smoothly; somebody isn't going to be happy when all is said and done.

Mortgagor "gives" the mortgage. Mortgagee "gets" the mortgage. I think I've got it. :confused

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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by Bacchus01 » Sun Aug 11, 2019 9:29 pm

astrohip wrote:
Sun Aug 11, 2019 9:14 pm
ResearchMed wrote:
Sun Aug 11, 2019 8:55 pm
I still don't see what the borrower/buyer expects to gain IF this is arranged as an "all proceeds to the lender".
As I mentioned above, my option makes this hardly worthwhile to them. After expenses, they will barely have a modest amount to apply against the balance.

I think they thought they could sell the slice, keep the money, with no other effort or expenses necessary. It's a small piece of land that won't affect them at all, so no issue there. And they would get a few thousand in their pockets.

I put the kibosh on that. :twisted:
I posted above but I’ve had this happen, although it was the state buying a piece of land and the mortgage holder required me to pay 100% of the land proceeds to them on the loan. Very typical.

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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by miamivice » Sun Aug 11, 2019 9:43 pm

AZAttorney11 wrote:
Sun Aug 11, 2019 7:14 pm
miamivice wrote:
Sat Aug 10, 2019 10:44 pm
I am not so sure that the OP has the amount of veto power he thinks he has.

Sure, if he takes the borrower to court, I am sure he can force his way. No questions there.

However, the borrower can record a short plat and transfer of title without involving the OP, no problem. Just write up the appropriate documents, take them to the county recorder, and record them.

What about the title company referenced above? Nothing says that a title company has to be involved in a transfer. In fact, I have transferred properties before without using a title company.

It may not be a "legal" transfer or an "above and aboard" transfer, but there is nothing stopping the borrower from doing what he wants, excepts the threat of a lawsuit.
This is wrong on multiple levels. This drivel should be disregarded in its entirety by those who have read it.
It's not drivel. It's actually correct.

You can indeed draw up a document to transfer property from Party A to Party B, even if it is colleratal that is used to secure a loan. The county will record it. The tax bill will be sent to the new owner. Technically, it is feasible.

However, if the person holding the mortgage objects, they can take the issue to court and likely a court would overturn the real estate transaction.

But there is nothing stopping a person from drawing up the deed and recording it with the county. As an attorney, I think you know that.

miamivice
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by miamivice » Sun Aug 11, 2019 9:45 pm

Bacchus01 wrote:
Sun Aug 11, 2019 7:28 pm
AZAttorney11 wrote:
Sun Aug 11, 2019 7:14 pm
miamivice wrote:
Sat Aug 10, 2019 10:44 pm
I am not so sure that the OP has the amount of veto power he thinks he has.

Sure, if he takes the borrower to court, I am sure he can force his way. No questions there.

However, the borrower can record a short plat and transfer of title without involving the OP, no problem. Just write up the appropriate documents, take them to the county recorder, and record them.

What about the title company referenced above? Nothing says that a title company has to be involved in a transfer. In fact, I have transferred properties before without using a title company.

It may not be a "legal" transfer or an "above and aboard" transfer, but there is nothing stopping the borrower from doing what he wants, excepts the threat of a lawsuit.
This is wrong on multiple levels. This drivel should be disregarded in its entirety by those who have read it.
Drivel might be a little harsh, but in fact it is almost completely wrong.
No, it is not. What mechanism exists that would prevent you from transferring property to another party, except a lawsuit? The county is required by law to record any document you provide to them, and they will treat it as a legally binding document until a court determines otherwise.

As the OP pointed out, no title company would insure the property nor would a title company draw up the documents to transfer the title. However, anyone with access to Word can create a title transfer document that will be recorded by the county.

For reference, I recently purchased a piece of vacant land that had an access easement to an adjoining property. As part of the condition of sale, I asked the adjoining property to release the easement, which they did with the assistance of an attorney. Their property was colleratal for a mortgage. I do not believe they ever received permission from the mortgage holder to release the easement, and I have title insurance on the property that we bought.

The access easement indeed was part of the collateral the bank was holding when the mortgage was taken out, so the most correct action would have been to ask the bank permission to release the easement. There were no recorded documents to indicate that the bank gave permission for the easement to be released. I don't know what conversations occurred between the bank and the neighboring property but I would expect that any changes to the deed of trust would be recorded under a new document, which didn't happen.

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J G Bankerton
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by J G Bankerton » Sun Aug 11, 2019 10:03 pm

miamivice wrote:
Sun Aug 11, 2019 9:43 pm
However, if the person holding the mortgage objects, they can take the issue to court and likely a court would overturn the real estate transaction.
A mortgage is a lean, property can't be sold until the lean is satisfied or released. Closing would not be possible with a lean on the property. That is the way it was when I closed on my home, the sellers had to satisfy all leans at the closing. The lawyers took the lean money off the top. So unless the borrower sells the parcel for the full price of the mortgage I don't see how they can satisfy the lean.

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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by miamivice » Sun Aug 11, 2019 10:09 pm

J G Bankerton wrote:
Sun Aug 11, 2019 10:03 pm
miamivice wrote:
Sun Aug 11, 2019 9:43 pm
However, if the person holding the mortgage objects, they can take the issue to court and likely a court would overturn the real estate transaction.
A mortgage is a lean, property can't be sold until the lean is satisfied or released. Closing would not be possible with a lean on the property. That is the way it was when I closed on my home, the sellers had to satisfy all leans at the closing. The lawyers took the lean money off the top. So unless the borrower sells the parcel for the full price of the mortgage I don't see how they can satisfy the lean.
What I am saying is that the person with the mortgage can draw up legal documents using Word and record them with the county. The county is required to record any documents that are properly formatted (they do not determine if the proper process was followed). The only recourse that a mortgage holder has is to file a lawsuit to reverse the transaction. You do not have to "close" via a title company. You can have the county record transfers of property direct without using a title company to close at all, if you are paying cash and the other party agrees.

Yes, it's weird. I am pointing out the technicalities in property transfers here.

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J G Bankerton
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by J G Bankerton » Sun Aug 11, 2019 10:19 pm

miamivice wrote:
Sun Aug 11, 2019 10:09 pm
What I am saying is that the person with the mortgage can draw up legal documents using Word and record them with the county. The county is required to record any documents that are properly formatted (they do not determine if the proper process was followed).
The lean is recorded along with the deed, I didn't get the deed until I paid off my mortgage. The lean holder has to sign off on any sale. This is in New Jersey. There is a reason all this is recorded with the county, it keeps people honest.

miamivice
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by miamivice » Sun Aug 11, 2019 10:25 pm

J G Bankerton wrote:
Sun Aug 11, 2019 10:19 pm
miamivice wrote:
Sun Aug 11, 2019 10:09 pm
What I am saying is that the person with the mortgage can draw up legal documents using Word and record them with the county. The county is required to record any documents that are properly formatted (they do not determine if the proper process was followed).
The lean is recorded along with the deed, I didn't get the deed until I paid off my mortgage. The lean holder has to sign off on any sale. This is in New Jersey. There is a reason all this is recorded with the county, it keeps people honest.
In that case, it depends on who holds the deed in the OP's case. If the OP hold the deed, he gets veto power. Simple as that.

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J G Bankerton
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by J G Bankerton » Sun Aug 11, 2019 10:33 pm

miamivice wrote:
Sun Aug 11, 2019 10:25 pm
J G Bankerton wrote:
Sun Aug 11, 2019 10:19 pm
miamivice wrote:
Sun Aug 11, 2019 10:09 pm
What I am saying is that the person with the mortgage can draw up legal documents using Word and record them with the county. The county is required to record any documents that are properly formatted (they do not determine if the proper process was followed).
The lean is recorded along with the deed, I didn't get the deed until I paid off my mortgage. The lean holder has to sign off on any sale. This is in New Jersey. There is a reason all this is recorded with the county, it keeps people honest.
In that case, it depends on who holds the deed in the OP's case. If the OP hold the deed, he gets veto power. Simple as that.
The county holds the deed in New Jersey and if there is a lean the lean holder has to sign off on any sale. In New Jersey the title to a car is held by the lender until it is paid off. That way they can repo it as the title holder.

Even after I got my deed I had a disagreement with the IRS and they put a lean on my property filed with the clerk.

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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by Nowizard » Mon Aug 12, 2019 8:28 am

You could redo the lien. If selling, there would almost certainly have to be a survey and separation of the two acres from the remaining amount. Those expenses should not be yours, of course. If those holding your lien had a survey and separated the land, could prior payments then be attributed to completely paying off the two acres with a subsequent "new loan" on the remaining acres? You then have the equivalent of having made two sales to the same purchaser, one for two acres that has been paid, another for 28 with a current note.

Tim

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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by AZAttorney11 » Mon Aug 12, 2019 12:54 pm

miamivice wrote:
Sun Aug 11, 2019 9:43 pm
AZAttorney11 wrote:
Sun Aug 11, 2019 7:14 pm
miamivice wrote:
Sat Aug 10, 2019 10:44 pm
I am not so sure that the OP has the amount of veto power he thinks he has.

Sure, if he takes the borrower to court, I am sure he can force his way. No questions there.

However, the borrower can record a short plat and transfer of title without involving the OP, no problem. Just write up the appropriate documents, take them to the county recorder, and record them.

What about the title company referenced above? Nothing says that a title company has to be involved in a transfer. In fact, I have transferred properties before without using a title company.

It may not be a "legal" transfer or an "above and aboard" transfer, but there is nothing stopping the borrower from doing what he wants, excepts the threat of a lawsuit.
This is wrong on multiple levels. This drivel should be disregarded in its entirety by those who have read it.
It's not drivel. It's actually correct.

You can indeed draw up a document to transfer property from Party A to Party B, even if it is colleratal that is used to secure a loan. The county will record it. The tax bill will be sent to the new owner. Technically, it is feasible.

However, if the person holding the mortgage objects, they can take the issue to court and likely a court would overturn the real estate transaction.

But there is nothing stopping a person from drawing up the deed and recording it with the county. As an attorney, I think you know that.
No. Just stop. You don't understand what a deed of trust is, or the powers conferred on the beneficial owner under the deed of trust, or how a Trustee's Sale operates. In a state like Texas, no judicial intervention is necessary to complete a Trustee's Sale of the property. That's right, no lawsuit or judge whatsoever. And if the mortgagor pulled a stunt like you suggest, that would constitute a non-monetary default and I'd file a Notice of Substitute Trustee (the lawyer of OP's choosing) immediately followed by a Notice of Trustee's Sale to start the clock and foreclose on the entire parcel.

whomever
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by whomever » Mon Aug 12, 2019 1:27 pm

"If those holding your lien had a survey and separated the land, could prior payments then be attributed to completely paying off the two acres with a subsequent "new loan" on the remaining acres? You then have the equivalent of having made two sales to the same purchaser, one for two acres that has been paid, another for 28 with a current note."

IANAL, but I sure hope the various theories that the mortgagor can partition the land against the will of the mortgage holder are wrong. Let's suppose you could, and take it to its logical conclusion: I buy a 10000 acre ranch for one zillion dollars, and then split it into two parcels, one of 9999 acres and one of 1 acre. I keep the 1 acre parcel and sell the 9999 acres. I'm not a good businessman, and sell the 9999 acres for one dollar. I now own a very expensive acre of land, decide it's not worth it, and default. I'm pretty skeptical of any legal theory that such a process will leave the original owner without title to the 9999 acres.

Otherwise, we'd all be selling all but one square foot of our lots to relatives for cheap.

Like I said, IANAL. I dunno what happens if the mortgagor, for example, quit claims part of the land to a third party. I suppose that would leave the third party in possession of the land once the original mortgage is paid off? But I think the third party is out of luck if the mortgage isn't paid off.

chevca
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by chevca » Mon Aug 12, 2019 1:33 pm

It's always funny to watch someone think they know more about something, than someone else that actually does that something for a living. Everyone thinks they're right on the internet, huh? :happy

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J G Bankerton
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by J G Bankerton » Mon Aug 12, 2019 1:43 pm

AZAttorney11 wrote:
Mon Aug 12, 2019 12:54 pm

No. Just stop. You don't understand what a deed of trust is, or the powers conferred on the beneficial owner under the deed of trust, or how a Trustee's Sale operates. In a state like Texas, no judicial intervention is necessary to complete a Trustee's Sale of the property. That's right, no lawsuit or judge whatsoever. And if the mortgagor pulled a stunt like you suggest, that would constitute a non-monetary default and I'd file a Notice of Substitute Trustee (the lawyer of OP's choosing) immediately followed by a Notice of Trustee's Sale to start the clock and foreclose on the entire parcel.
In New Jersey the sale would not happen; at the closing all leans have to be satisfied or there can be no sale. The people I bought my house from had to satisfy a lean and they were dragging their feet. My lawyer had to serve a time is of the essence paper to get the owner moving. At the closing the seller's lawyer took money from the sale to cover the lean and the rest went to the owner.

In my case the lean was smaller than the sale price so it worked. The OP's situation is more complicated.

I just canaled a home equity line of credit I never use with Wells Fargo. They hit me with a $50 charge to release the lean filed with the county clerk.

adamthesmythe
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by adamthesmythe » Mon Aug 12, 2019 2:31 pm

whomever wrote:
Mon Aug 12, 2019 1:27 pm


Like I said, IANAL. I dunno what happens if the mortgagor, for example, quit claims part of the land to a third party. I suppose that would leave the third party in possession of the land once the original mortgage is paid off? But I think the third party is out of luck if the mortgage isn't paid off.
A quitclaim tranfers all your interest in the property. In this hypothetical case the original owner has no interest in the property after the mortgage is paid off. The third party has nothing.

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8foot7
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by 8foot7 » Mon Aug 12, 2019 2:33 pm

AZAttorney11 wrote:
Mon Aug 12, 2019 12:54 pm
miamivice wrote:
Sun Aug 11, 2019 9:43 pm
AZAttorney11 wrote:
Sun Aug 11, 2019 7:14 pm
miamivice wrote:
Sat Aug 10, 2019 10:44 pm
I am not so sure that the OP has the amount of veto power he thinks he has.

Sure, if he takes the borrower to court, I am sure he can force his way. No questions there.

However, the borrower can record a short plat and transfer of title without involving the OP, no problem. Just write up the appropriate documents, take them to the county recorder, and record them.

What about the title company referenced above? Nothing says that a title company has to be involved in a transfer. In fact, I have transferred properties before without using a title company.

It may not be a "legal" transfer or an "above and aboard" transfer, but there is nothing stopping the borrower from doing what he wants, excepts the threat of a lawsuit.
This is wrong on multiple levels. This drivel should be disregarded in its entirety by those who have read it.
It's not drivel. It's actually correct.

You can indeed draw up a document to transfer property from Party A to Party B, even if it is colleratal that is used to secure a loan. The county will record it. The tax bill will be sent to the new owner. Technically, it is feasible.

However, if the person holding the mortgage objects, they can take the issue to court and likely a court would overturn the real estate transaction.

But there is nothing stopping a person from drawing up the deed and recording it with the county. As an attorney, I think you know that.
No. Just stop. You don't understand what a deed of trust is, or the powers conferred on the beneficial owner under the deed of trust, or how a Trustee's Sale operates. In a state like Texas, no judicial intervention is necessary to complete a Trustee's Sale of the property. That's right, no lawsuit or judge whatsoever. And if the mortgagor pulled a stunt like you suggest, that would constitute a non-monetary default and I'd file a Notice of Substitute Trustee (the lawyer of OP's choosing) immediately followed by a Notice of Trustee's Sale to start the clock and foreclose on the entire parcel.
This poster is also conveniently omitting the fact there are plenty of services that monitor for these types of transfers at the county/parish level as well as that many jurisdictions have "notice of transfer" functions that would automatically inform related parties of transactions involving a parcel. What this poster is describing is filing fraudulent documents and while it might "work" insofar as the fraudulent documents could be recorded in a deed registry, it will with near absolute certainty result in pain, loss of property, and lawsuits.

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astrohip
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by astrohip » Mon Aug 12, 2019 2:58 pm

Nowizard wrote:
Mon Aug 12, 2019 8:28 am
You could redo the lien. If selling, there would almost certainly have to be a survey and separation of the two acres from the remaining amount. Those expenses should not be yours, of course. If those holding your lien had a survey and separated the land, could prior payments then be attributed to completely paying off the two acres with a subsequent "new loan" on the remaining acres? You then have the equivalent of having made two sales to the same purchaser, one for two acres that has been paid, another for 28 with a current note.

Tim
I've stopped replying in this thread, since it went off track, and the advice I received here (thanks BHs!) was spot-on and used. But I have to reply to this...

No. A thousand times no. Sure, they can have a survey done, but they can't just "separate the land". My loan documents, lien and deed of trust are all explicit. They are the same documents used in millions of land sales in Texas every year. There are NO loopholes.

And replying to the other poster who thought the seller could just "transfer the land to the buyer/neighbor without going thru a title company", no no no. No one buys land without using a title company. No. One. And don't give me some example of your Aunt Edna who bought six acres from Jedidiah Clampett in 1806 yada yada. No one in today's world circumvents a title company and policy. NO. ONE.

I relish the interesting conversation on this topic, but can we stop the ridiculous theories of how this guy is going to steal/sell my land from under me. It ain't happening, and is just side-tracking the valid conversation.

Thanks.
"Happiness is not about doing, it’s about being." - R Branson

Goal33
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by Goal33 » Mon Aug 12, 2019 3:20 pm

OP, did they accept one of your two options or decide to do nothing?
A man with one watch always knows what time it is; a man with two watches is never sure.

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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by miamivice » Mon Aug 12, 2019 3:31 pm

Obviously, my contributions to this thread aren't going over well. I will discontinue posting on this subject.

All I was saying is that in many situations, one can do boundary line adjustments and record a boundary line adjustment with the county without a title company being involved. If one transfers property in violation of a deed of trust, the only avenue of recourse is through the legal system.

I am not sure if folks realize that the county doesn't review documents for recording for legitimacy before recording them, at least in the counties I am familiar with. By law, the county I live in will record any document that is properly recorded.

With regards to the OP saying nobody transfers property without a title company, that is not true. Six years ago, I transferred interest in a property I own without invoking a title company. I drew up the title using Word (reading the county requirements for formatting), had my wife and I notarize it, and dropped it off at the county recorder. Simple and cheap. I've seen it happen a number of times, especially in situations that involve family transfers or low value property.

That is all. Signing off this thread.

chevca
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by chevca » Mon Aug 12, 2019 3:59 pm

miamivice wrote:
Mon Aug 12, 2019 3:31 pm
I will discontinue posting on this subject.
He says..... just before posting a bunch more about the subject.... :oops:

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astrohip
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by astrohip » Mon Aug 12, 2019 4:20 pm

Goal33 wrote:
Mon Aug 12, 2019 3:20 pm
OP, did they accept one of your two options or decide to do nothing?
Never heard back. I think they decided to regroup and reconsider their options.
"Happiness is not about doing, it’s about being." - R Branson

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J G Bankerton
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by J G Bankerton » Mon Aug 12, 2019 4:35 pm

astrohip wrote:
Mon Aug 12, 2019 2:58 pm
And don't give me some example of your Aunt Edna who bought six acres from Jedidiah Clampett in 1806 yada yada.
There are three hundred and fifty years of property records for the land my house sits on. The deed signed by a Shaman of the Lenape tribe is still on record. A copy is kept by the Proprietors of West Jersey, the buyers under a grant from the Duke of York.

There is a description of the land and the payment made. Payment was in guns and rum, I think they got a good deal. There was no mention of a title search.

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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by astrohip » Mon Aug 12, 2019 4:42 pm

J G Bankerton wrote:
Mon Aug 12, 2019 4:35 pm
Payment was in guns and rum, I think they got a good deal.
Depends on the rum. :beer
"Happiness is not about doing, it’s about being." - R Branson

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J G Bankerton
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by J G Bankerton » Mon Aug 12, 2019 7:31 pm

miamivice wrote:
Mon Aug 12, 2019 3:31 pm
Obviously, my contributions to this thread aren't going over well.
Your post got me to thinking. I did buy a house with no title search or survey and it had a lien on the property. I bought my house for $1 in a divorce settlement. I did have to get the lien holder to agree to remove my ex from the mortgage. She was listed with no income so they agreed.

If the lien holder did not agree I would have had to pay off the lien before the sale could be recorded.
Last edited by J G Bankerton on Mon Aug 12, 2019 8:22 pm, edited 1 time in total.

AZAttorney11
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by AZAttorney11 » Mon Aug 12, 2019 8:06 pm

J G Bankerton wrote:
Mon Aug 12, 2019 7:31 pm
miamivice wrote:
Mon Aug 12, 2019 3:31 pm
Obviously, my contributions to this thread aren't going over well.
Your post got me to thinking. I did buy a house with no title search or survey and it had a lean on the property. I bought my house for $1 in a divorce settlement. I did have to get the lean holder to agree to remove my ex from the mortgage. She was listed with no income so they agreed.

If the lean holder did not agree I would have had to pay off the lean before the sale could be recorded.
lien*

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J G Bankerton
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by J G Bankerton » Mon Aug 12, 2019 8:20 pm

AZAttorney11 wrote:
Mon Aug 12, 2019 8:06 pm
J G Bankerton wrote:
Mon Aug 12, 2019 7:31 pm
miamivice wrote:
Mon Aug 12, 2019 3:31 pm
Obviously, my contributions to this thread aren't going over well.
Your post got me to thinking. I did buy a house with no title search or survey and it had a lean on the property. I bought my house for $1 in a divorce settlement. I did have to get the lean holder to agree to remove my ex from the mortgage. She was listed with no income so they agreed.

If the lean holder did not agree I would have had to pay off the lean before the sale could be recorded.
lien*
Sorry I have a problem with vowels, especially the i,a and e and spell check doesn't catch sound alike words.

Bacchus01
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by Bacchus01 » Mon Aug 12, 2019 8:38 pm

miamivice wrote:
Mon Aug 12, 2019 3:31 pm
Obviously, my contributions to this thread aren't going over well. I will discontinue posting on this subject.

All I was saying is that in many situations, one can do boundary line adjustments and record a boundary line adjustment with the county without a title company being involved. If one transfers property in violation of a deed of trust, the only avenue of recourse is through the legal system.

I am not sure if folks realize that the county doesn't review documents for recording for legitimacy before recording them, at least in the counties I am familiar with. By law, the county I live in will record any document that is properly recorded.

With regards to the OP saying nobody transfers property without a title company, that is not true. Six years ago, I transferred interest in a property I own without invoking a title company. I drew up the title using Word (reading the county requirements for formatting), had my wife and I notarize it, and dropped it off at the county recorder. Simple and cheap. I've seen it happen a number of times, especially in situations that involve family transfers or low value property.

That is all. Signing off this thread.
This must be unique to your area.

I once had an issue where the property I bought was sold by the builder to me with a new house on it. The property was split from his and abutted his.

Later, he decided he had forgotten to change the lot lines because part of my lot was now actually covering where he had a building (just part of the building).

The County called me when he filed all the paperwork. He wanted to basically swap one piece for another, moving the line to put the building on his property.

I told them to pound sand unless he was planning to buy the land from me. He didn't want to. The County would not record his paperwork, even though it was all completed properly.

I moved less than a year later and my company bought the house. It came up in a title search that the paperwork was on record at the county, but not officially recorded. My company's agents wanted me to agree to the adjustment in order to have no issues on the title. I told them to pound sand. The county pulled the paperwork completely and the property was sold. I have no idea if the builder was upset, but I do know that he now has a messy title situation on his hands with his property as he has a building that is not fully on his property and does not mean any codes. Good luck.

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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by BillyK » Mon Aug 12, 2019 9:04 pm

Almost all standard liens/notes for real estate have due on sale/acceleration clauses. I imagine the OP’s likely does too.The sale of any part of the property will trigger it, so it won’t just create a cloud on title. Larger tracts such as owned by developers will include special language for granting the rights to sell off tracts/lots with explicit percentages due from the seller to the lender. Most notes have a condemnation clause so that partial acquisition from a condemnor won’t trigger the due on sale clause.

Texas is a deed of trust state, so mortgages don’t exist. A deed of trust simplifies the foreclosure process. Although, there aren’t mortgages, now and then loan documents in Texas will use mortgagor/mortgagee which may be what the OP is referencing. Deed of trusts will have trustor/trustee. Then the lien/note will have lender/lender, grantor/beneficiary, etc.

A lot of fraudulent land deals occurred in Texas, particularly leading up to 2008. So called developers would deed sell smaller tracts from larger ones without going through proper platting. It would often leave people with non-developable, landlocked tracts, unknowingly as tenants in common with other parties since the larger tract was never legally platted. The State of Texas has strict statues for subdividing land. The counties and cities adhere to the state statues and have ones of their own too. You can’t legally just go out and deed someone 2 acres without often going through a complicated and expensive process if allowed. Likely, that is what the buyer and seller found out.

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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by AZAttorney11 » Mon Aug 12, 2019 9:04 pm

J G Bankerton wrote:
Mon Aug 12, 2019 8:20 pm
AZAttorney11 wrote:
Mon Aug 12, 2019 8:06 pm
J G Bankerton wrote:
Mon Aug 12, 2019 7:31 pm
miamivice wrote:
Mon Aug 12, 2019 3:31 pm
Obviously, my contributions to this thread aren't going over well.
Your post got me to thinking. I did buy a house with no title search or survey and it had a lean on the property. I bought my house for $1 in a divorce settlement. I did have to get the lean holder to agree to remove my ex from the mortgage. She was listed with no income so they agreed.

If the lean holder did not agree I would have had to pay off the lean before the sale could be recorded.
lien*
Sorry I have a problem with vowels, especially the i,a and e and spell check doesn't catch sound alike words.
:sharebeer

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astrohip
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by astrohip » Mon Aug 12, 2019 9:16 pm

BillyK wrote:
Mon Aug 12, 2019 9:04 pm
Texas is a deed of trust state, so mortgages don’t exist. A deed of trust simplifies the foreclosure process. Although, there aren’t mortgages, now and then loan documents in Texas will use mortgagor/mortgagee which may be what the OP is referencing. Deed of trusts will have trustor/trustee. Then the lien/note will have lender/lender, grantor/beneficiary, etc.
You are correct. It is a Deed of Trust. The word "mortgage" is never used. I used it both out of ignorance and simplicity.

PS: I know you weren't correcting me, just educating all of us. And it's appreciated.
"Happiness is not about doing, it’s about being." - R Branson

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J G Bankerton
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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by J G Bankerton » Tue Aug 13, 2019 8:45 am

BillyK wrote:
Mon Aug 12, 2019 9:04 pm
Texas is a deed of trust state, so mortgages don’t exist. A deed of trust simplifies the foreclosure process.
There can be a lien on property without a "deed of trust". I own my home free and clear but the IRS put a line on my property. Except for it being on my credit report it means nothing unless I want to sell.

I settled with the IRS though, they don't suffer fools gladly. :(
I kept their letter releasing the lien with my taxes just in case.

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Re: My mortgagor wants to sell a slice of the land. Thoughts?

Post by jtdavid » Tue Aug 13, 2019 9:15 am

miamivice wrote:
Mon Aug 12, 2019 3:31 pm
Obviously, my contributions to this thread aren't going over well. I will discontinue posting on this subject.

All I was saying is that in many situations, one can do boundary line adjustments and record a boundary line adjustment with the county without a title company being involved. If one transfers property in violation of a deed of trust, the only avenue of recourse is through the legal system.

I am not sure if folks realize that the county doesn't review documents for recording for legitimacy before recording them, at least in the counties I am familiar with. By law, the county I live in will record any document that is properly recorded.

With regards to the OP saying nobody transfers property without a title company, that is not true. Six years ago, I transferred interest in a property I own without invoking a title company. I drew up the title using Word (reading the county requirements for formatting), had my wife and I notarize it, and dropped it off at the county recorder. Simple and cheap. I've seen it happen a number of times, especially in situations that involve family transfers or low value property.

That is all. Signing off this thread.
Agree with miamivice on this issue. You can deed a portion of a mortgaged property to another party. BUT the original lien encumbrance will remain on the entire property. So if there is a due on sale clause in the loan documents the lender COULD take exception and foreclose (on the entire property). Or if there was a monetary default or some other default on the original loan the lender could still foreclose (on the entire property). Obviously you couldn't get title insurance on this partial sale but that doesn't mean you can't record a deed. I've bought and sold about three dozen properties over the years and a few of the transactions have been without title insurance (either when buying or selling). Never had a problem but of course you have to know what you are doing and there is always a risk a problem will pop up.

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