In the past , only paper records existed . Then came what was considered a substantial improvement called a microfiche records database . Microfiche was a flat piece of film that contained microphotographs . These images were photographed and reduced from the original . The materials were made of plastic ( acetate ) between the 1930s and 1980s , then polyester after the 1960s . The film has a silvergelatin emulsion coating on it . A single 4 x 6inch sheet of film may have many separate frames . Copies of documents would be obtained using a scanner and printing device . By today ’ s standards , this is an obsolete method in our world of instant information .
Public records may contain notices of encumbrance for both voluntary and involuntary rights and claims . Liens and encumbrances create clouds on the title that must be acknowledged and dealt with by the transactionprocuring broker , purchaser or lender . A purchaser or lender may accept the property with questionable conditions , remove it from the title , modify it , or reject it because the risk is too significant .
Each document recorded against the property may contain agreements , considerations , prohibitions , and risks the borrower / lender must consider . A recorded trust deed may have 2040 pages of legalese that the borrower should review , as should the borrower ' s counsel , agent fiduciary , and prudent lender . The document identifies three parties : a lender , a borrower , and a trustee . Documents include a comprehensive property description , an assessor ’ s parcel number ( APN ), a granting clause , a legal description , statements , and clauses encompassing all the rights , titles , and interests held by the three parties . Clauses may also include " representations and warranties ." " dueonsale ," " dueonfurther encumbrance ," and " default provisions " by the borrower .
https :// www . law . cornell . edu / wex / deed _ o f _ trust
Because of the tremendous complexity , the subject relating to various clauses in loan documents , which will generally create restrictions and prohibitions , should be addressed separately . I encourage interested parties to seek competent counsel advice .
A real estate or lending broker / agent has a fiduciary responsibility to assist the buyer / borrower in understanding all documents relating to a purchase or loan transaction . Below is a good review summary of fiduciary duties .
https :// dre . ca . gov / files / pdf / The _ Real _ Est ate _ Brokerage _ as _ Fiduciary . pdf
Sometimes , a property owner may record notices of change of ownership in public records that amend the method of ownership status . An example would be changing or conveying the title of a property from " husband and wife as joint tenants " to a " revocable family trust ." Another example may be recording a divorce decree or a quitclaim relinquishing one ' s ownership interest in the property to another party as part of a negotiated settlement .
As a matter of law , only the trustees of a revocable family trust can hold legal title to real property , not the family trust itself . A revocable family trust is a legal entity that cannot act on behalf of the trust without the trustee . The trust document is an agreement between the key parties of the trust .
6 ) What is a first , second , and third lien priority position ?
Lien priority is proved by the precise date and time when the document is recorded in the recorder ’ s office and when and where it becomes a matter of public records . When a document is recorded , it is date and timestamped and affixed with a sequential recording reference number .
Example : If a borrower or their title company recorded three liens simultaneously on a single property , that would create a first , second , and third lien , regardless of the dollar amount of each lien . The first lien , or earliest recorded , is considered a senior lien ; the second and third liens are junior liens , with the second lien senior to the third . After the documents are recorded and scanned into the public records , the person who recorded them will receive the originals back in their possession . A title company , lender , or borrower who recorded the documents receives the original date and timestamped documents with reference numbers to confirm validity and safekeeping .
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