Security Instrument Type?

Question

Hi,

With regards to the title topic.

I am looking at buying a SFR Note in Memphis TN.

And I don't know whether the Security Instrument Type is a Land Contract or Deed of Contract or other?

Would someone plz advise on how the Security Instrument Type is determined and how do I confirm that for sure???

Thanks in advance

Mike Hartzog · Answer

Tennessee is a deed of trust state, so if there is a Promissory Note there will also be a Deed of Trust as the security instrument.  If the property was sold using a land contract, there is no security instrument because ownership of the property remains with the seller until terms of the contract is satisfied.

Regarding the other replies to this thread, BP encourages its members to post and answer questions.  It's not our job to determine whether their knowledge is adequate to play in a particular area of investing, refusing to answer questions based on this assessment.  IMO these types of questions should be respectfully answered without the "you are not yet worthy" message.  Everyone who is investing in this space has had to navigate the learning curve to get to where they are now.  Let's be respectful to those who are coming here for help in moving along that same curve.

Wayne Brooks · Answer

SMH.  Okay, going away.

Wayne Brooks · Answer

@Sue Bishop  This is pretty basic stuff, as was your question about UPB in your other thread.  You really, really need to hold off on trying to buy notes until you have a Much better understanding of how they work, what factors affect their value, costs to enforce, etc.  I can't recommend any particular study material (there are lots of threads on here discussing notes, NPN's, etc), but with your level of knowledge at this point I'm afraid you'll get roped into some of the garbage, worthless notes for sale out there.

Sue Bishop · Answer

Great thanks Mike.Have now viewed & have confirmed that the security instrument for the note concerned is indeed a Deed Of Trust!!!

Cheers!!!

Mike Hartzog · Answer

@Sue Bishop

They are recorded in the county records, so you can either go to the county recorder directly or you can order a title report.  Most investors take the latter path.  I currently use http://protitleusa.com for title reports.

Sue Bishop · Answer

Also are security instruments viewable publicly? If so plz provide a weblink.

Thanks again.

Sue Bishop · Answer

Don,

Am analysing the Purchase & Sale Agreement (& no I won't be buying it & yes it's a promissory note) which ask's what the security type is (i.e) if it's a Deed Of Trust, a land contract etc.

@Mike Hartzog is there a website link that confirms Tennessee is a deed of trust state?Thanks

Dion DePaoli · Answer

Sue,

The desire to learn is admirable.  Careful not to get ahead of yourself though.  A Security Instrument is a term used generically to refer to specifically a mortgage, deed of trust, or security deed which grants certain rights from a property owner to a creditor to secure a debt.  So to be clear, what you asked for, what is a security instrument - is often dependant upon the state in which the subject property resides and local custom where states which operate in title theory will often use a deed of trust but a mortgage may also be used from time to time.  A lien theory state uses a mortgage and does not provide for use of a deed of trust.  Those two separate security instruments operate differently but achieve similar results - ergo the security of a debt.

A Warranty Deed is not a security instrument as it does not grant interest to a creditor it transfers interest in real property from a Grantor to a Grantee.  AKA Seller to Buyer.  You do not want to make a habit of trying to make what you see bend to your idea of what you think you know as you will mislead yourself while trying to learn.  Warranty Deeds, Special Warranty Deeds, Quit Claim Deeds and Bargain and Sale Deeds have granting clauses and habendum clauses which create the conveyance and identify restrictions and covenants of that which is being transferred among the parties.  The language while somewhat common is not uniform so details do matter.The brief recital above is out of context to the rest of the text but does not resemble a conveying clause which would typically contain words such as "convery, grant, sell, warrant...etc".  So we cannot judge by your post what you are actually looking at.  In general it would be of concern for a deed to carve out a conveyance subject to a deed of trust.  While not fully improper, the interests being granted are by way of the language of the text limiting a fee simple interest from being given. Without more information it is not possible to give you information which you do not know that you don't know about what you are or are not looking at.  Under that idea, it is often better to play nice on the boards so those who do know more can be of better assistance.

Sue Bishop · Answer

@Mike Hartzog thankyou for answering a simple question.This seems to concur:

The Shelby County website has a Warranty Deed (WD) that's registered against the concerned property,  The WD states that the transfer & conveyance is made:

"subject to the Deed Of Trust executed by ...."

Much appreciate Mike have a great day!!! :)

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Security Instrument Type?

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