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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