Nevada Clarifies Mortgage Law, But What About Deed of Trust Lender Entry Provisions?

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In May 2019, effective October 1, 2019, Nevada passed Senate Bill 382 amending the law pertaining to deeds of trust, foreclosure sales, and homeowners’ associations.

Among other things, this is a change to Nevada Revised Statute § 40.050, whose language states that a mortgage of real property is not deemed a conveyance. If a mortgage does not constitute a conveyance, the mortgage lender may take possession on the home upon the inhabitant’s default, bypassing a judicial foreclosure sale.

Nevada employs a deed of trust between the home buyer and the lender. A deed of trust places the legal ownership of a home with a designated trustee until the buyer—who holds equitable ownership—pays off the loan.   

Of course, some buyers do experience financial challenges and find themselves unable to pay their mortgages.

Here, we briefly explore the ramifications, as seen through a case that shook mortgage lenders’ expectations in homes they held legally through deeds of trust.

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The Gift of Real Estate: What You Need to Know

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Making a home into a gift involves a gift deed. The gift deed legally transfers the title of the property from you, the grantor or donor, to another person or entity. This type of conveyance may be used to convey property as a gift from one family member to another, or to donate property to a nonprofit.

A mere promise to convey the property at some point in the future does not constitute a legally sound gift. A properly drafted deed makes a gift outright—a conveyance for no consideration. In other words, the giver makes the gift unequivocally, with no compensation expected, and no strings attached.

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Real Estate Title Insurance: A Brief Explanation

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Title insurance emerged more than a century ago. It had a purpose: to stop swindlers from cheating buyers, by ascertaining that land was, in fact, owned by the person selling it.

Since then, it has grown into a multi-billion-dollar business. 

And while today’s title insurance industry ostensibly protects homeowners from defects in their deeds, some believe it has been rendered practically obsolete in the digital age. Today, a record search can be done for less than a tenth of the prevailing rate of title insurance—which can exceed $2000, depending on the home’s price and the state in which the property sale occurs. 

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Why Do Real Estate Deeds Require a Notary?

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A notary’s acknowledgement is vital to the integrity of the residential property deed. Why?

The real estate deed is a formal instrument. It must verify the grantor’s interest in, and right to convey, the property. It must protect the interest transferred to the grantee. Notarization gives the deed a strong presumption of validity relative to other types of property documents. The careful stewardship applied to a home deed helps keep a clear chronicle of ownership and preserve the chain of title. Without such care, a bona fide purchaser might one day be forced to confront claims by others who believe they hold interests in the same real estate.

Here, we outline a notary’s job, and how it becomes an integral element of a real estate transaction.

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Estate Planning for Your Real Estate Holdings

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Real estate can be a fantastic investment. It is often considered one of the most stable money moves that you can make if you are looking for a way to see real return on a business venture, sometimes with little personal involvement.

However, when you hold several properties, you need to take steps to protect that investment. One of the ways that you should do that is by developing an estate plan that works for your unique situation. It is not only a good idea for you personally, but it will also be very helpful for your heirs.

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What Is a Deed of Trust?

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With a deed of trust, a buyer pledges an interest in real estate to secure a loan. In some states this takes the place of a mortgage document. (For a list of states commonly using deeds of trust see the section on Mortgage States and Deed of Trust States in our previous post, “You’ve Paid Off the Mortgage. What Happens Now?”)

Whereas a mortgage agreement is formed between the borrower and the lender, a deed of trust, also known as a trust deed, has one key difference. The trust deed designates a trustee—a third party who retains legal ownership of the home until the buyer completes the payoff.  

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Recording Real Estate Documents: Time is Priority

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State recording acts enable people to determine whose interest prevails if interests in the same property have been conveyed to several parties. For instance, what if a piece of real estate has several encumbrances: mortgage debt, a mechanic’s lien, and others? We need to know the order of priority.

Deals are made based on these stakes, so it’s essential to know how to preserve claims in a piece of property. The best practice is to record any new interest promptly. This way, should there be any conflicting claim at a later date, the dispute can be settled.  

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The Abstract of Title in Real Estate: What Is It?

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An abstract of title is a written chronology of all recorded documents and proceedings related to a specific piece of real estate. It shows the names of all the owners, how long each held title, and what each paid for the property.

The abstract is used for verifying a property’s marketability. The abstract offers assurance that the property is just as the seller represents it, both in the accuracy of its physical description and the integrity of its title.

The classic title abstract goes back in history to the earliest available records—sometimes as far back as the original land grant or patent deed from the U.S. government.

The abstractor of title is the person who researches this history, summarizes the relevant documents, and certifies the binder as true and complete.

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Preferred Pronouns in Real Estate Deeds

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Corey McCann is closing on a condo. Corey has just one more question for the title company agent:

I wonder why, in the definitions in the mortgage agreement for the recorder’s office, I’m called “Corey McCann, a single woman.” Only my name is relevant. I could understand declaring the single status—if there is a firm reason that the record must show, for example, that there is no co-habitant or person who might try to claim an interest in a divorce. But I don’t voluntarily identify myself in public documents or online by gender. I’d rather not do so now.   

The title company agent answers:

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