Quit claim deed, First position lien holder

[Ron Ahearn]

Being new at lending, I come across an interesting Opp.

Client according to county records buys and owns a home worth 90,000, paid 35000 and has a 25000.00 homestead exemption, making taxes very cheap. He has no mortgage pending as of today. I have the copy of the deed from 2012 provided by a title company. 

He is however late on his taxes to the tune of less than 500.00 and his HOA payments for which they have not yet foreclosed. Which is why I am involved.

My question is, how much title work would you do to be sure that a first position promissory note get's recorded? client has offered to provide for my safe keeping an executed Quit Claim Deed as added security. ( not worth the paper if I am not first position I think?)

Anyone have advice and an education for me here?

Quit claim deeds can be given ton S-corps?

Ok and for those who are curious about the loan, he has agreed to a 15,000.00 loan at 11% for year 1 and 12% for year two. at which point the loan must be paid. we want him to pay off as we aren't in the business to evict.

[Bill Gulley]

Give the title company written closing instructions to file a first mortgage and obtain a lender's title policy, they will take care of everything. It is a closing letter from you to them, it should be acknowledged at settlement. 

Do not use a quit claim with a note/mortgage, you'll be circumventing foreclosure laws and can get nailed for  predatory lending if they balk if you use it. Even if the borrower offers it, the borrower family, attorney, estate can enter the picture as well as other creditors, I'd suggest you just don't go there. You will have a deed of trust. If the borrower is living in the property, ask your attorney about compliance requirements with Dodd Frank. Good luck :)