The term title refers to a document that lists the rightful owner of a property. Titles may be issued to represent ownership of personal and personal property. Personal property is anything that does not include real estate, such as appliances, vehicles, antiques or works of art. There are three theories about who is entitled to mortgaged property. Under the title Theory, the title to the security right belongs to the hypothecary creditor. However, most states follow the privilege theory, according to which legal title remains with the mortgage debtor, unless there is foreclosure. Finally, the intermediate theory applies the theory of privilege until there is a default of the mortgage, after which the title theory applies. In title theory, a lender can simply step in and take possession of the property if a borrower defaults on the loan. Since the lender is technically the owner of the property, the lender simply revokes the borrower`s fair title and takes the property. People can own real estate for their principal residence or hold it as an investment rental property, and their ownership is determined by a so-called title.

There are several types of real estate titles, as well as less common methods of owning a property. It is important to know these differences so that you can decide which method best suits your needs. In the case of wholly owned and shared by individuals, potential owners should consider how their title should or could be transferred, either by sale or in the event of death, before choosing one method over another. Real estate ownership can take different forms, each of which has an impact on ownership transfer, financing, collateralization and taxation. Each type of title method has its advantages and disadvantages, depending on a person`s particular situation and how ownership should be transferred in the event of death, divorce or sale. The most common methods of holding securities are as follows: this regulation, in which the lender was theoretically the absolute owner, but in practice had few practical property rights, was considered artificial embarrassing in many jurisdictions. Under the act, the common law position was changed so that the mortgage debtor (borrower) would retain ownership, but the rights of the hypothecary creditor (lender) such as foreclosure, power of sale and the right to take possession would be protected. In the United States, states that have reformed the type of mortgages in this way are known as pawn states. A similar effect was achieved in England and Wales by the Law of Property Act 1925, which abolished mortgages by transferring a simple royalty. In the case of a death mortgage, the mortgagee (the lender) becomes the owner of the mortgaged property until the loan is repaid or another mortgage obligation is fully fulfilled, a process called “repayment.” This type of mortgage takes the form of a transfer of the property to the creditor, provided that the property is returned upon repayment. A mortgage interest rate can take one of two forms, depending on the state you live in.

The lender can either own the property directly (but still allow you to occupy the property as if you owned it), or the lender can put a “mortgage lien” on the property. The main advantage of owning a property as a sole proprietor is the ease with which transactions can be carried out, as no other party needs to be consulted to authorize the transaction. If the borrower tries to sell the property before satisfying the debt, the mortgage lien will appear as a cloud over the title in a title search. The lien allows the lender to step in and claim a portion of the income sufficient to satisfy what remains of the loan before the lien is released, erasing the title and allowing the sale to continue. In some jurisdictions, mainly in the United States,[17] mortgages are non-recourse loans: if the funds recovered from the sale of the mortgaged property are not sufficient to cover the outstanding debt, the lender may not have recourse to the borrower after foreclosure. In other jurisdictions, the borrower remains liable for all remaining debts through a default judgment. In some jurisdictions, the first mortgages are non-recourse loans, but the second mortgage and subsequent mortgages are recourse loans. According to the so-called “provisional theory” of mortgages, a mortgage is considered the creation of a lien on the property encumbered by the mortgage until an event of default occurs under the loan agreement. After such a period, the same mortgage is interpreted according to the theory of the title.

This is achieved by including a provision in the loan agreement that allows the borrower to retain legal ownership of the secured property, with the express agreement that the lender can seize extrajudicially or extrajudicially if the borrower defaults on the loan. In the United States, more states are privilege theory states than title theory states or intermediate theory states. [21] The title theory states that a mortgage continues to be a transfer of legal title to secure a debt, while the mortgage debtor always retains fair title. [22] In the theoretical states of lien, mortgages and trust deeds have been redesigned to impose a non-possessory lien on the title of the pledged property, while the mortgage debtor always has legal title and just title. The debt instrument is designated in civil courts with a form of Latin hypotheca (e.B. Sp hipoteca, Fr mortgage, Germ mortgage), and the parties are called mortgager (borrower) and mortgage (lender). A civil mortgage is exactly equivalent to an English mortgage by legal office or a us lien mortgage. Specific procedures for the seizure and sale of the mortgaged property almost always apply and can be strictly regulated by the government concerned. In some jurisdictions, foreclosure and sale can occur fairly quickly, while in others, foreclosure can take several months or even years. In many countries, the ability of lenders to make foreclosures is extremely limited and the development of the mortgage market has been much slower.

The relatively slow, costly and cumbersome process of judicial foreclosure is a major motivation for the use of trust deeds, as they provide for extrajudicial enforcement by trustees through “sales authority clauses”. There are similarities between the two types of titles. Think of them as two halves of the same whole. Both grant certain rights to the natural or legal person whose name appears on the title deed. Both are legally binding and enforceable in court. An owner must have both “full” ownership and use of a property. For real estate purchases that use traditional mortgages, the distinction between equity and title does not apply. Instead, the bank or lender lends both titles to the property in question using an escrow deed. The lender then retains the financial and legal interest in the property until the buyer repays the loan. In order to protect the lender, a mortgage is usually registered in a public register by legal charge.

Because mortgage debt is often the debtor`s largest debt, banks and other mortgage lenders conduct title searches to ensure that no mortgage is already registered on the debtor`s property that could be a higher priority. Tax privileges will be before mortgages in some cases. For this reason, if a borrower has property taxes outstanding, the bank will often pay them to prevent the secured creditor from seizing and cancelling the mortgage. Colocation allows an owner to use the assets created by his share of the property as collateral for financial transactions, and creditors of an owner can only levy privileges on that owner`s share of the property. This type of title also makes buying much easier. How you buy a property can have a long-term impact on your property of that property. .