Chapter III -
- 1. Trust deeds.
- 2. As to mortgages.
- 3. Mortgage forms.
- 4. Payments.
- 5. Assignments.
- 6. Redemption of mortgages.
- 7. Equity of redemption.
There is one condition under which the grantor does not turn over or deliver the deed to the grantee after it is made. This is known as a Deed in Escrow.
A deed "delivered in escrow" is when the document is placed with a third party to be by him delivered to the grantee when a certain time has elapsed or certain conditions have been fulfilled.
When the conditions have been complied with, the deed is given by its custodian to the grantee, which is as legal as if it were given by the grantor in person.
A trust deed is the form used to convey property to some person who is entitled to its proceeds or profits.
This form of deed is often used to secure the payment of a debt. In some states they take the place of mortgages.
Where the trust deed is meant to take the place of a mortgage to secure a debt payment, the property is deeded to a third party known as a "trustee."
The trustee in this case is the agent for debtor and creditor, and he must act impartially.
The trust deed specifies the character of the debt to be secured. In case of failure to pay the debt as agreed on, the trustee may, if so warranted, sell the property, and pay the obligation from the proceeds.
The grantor in a trust deed, if not stipulated to the contrary, is entitled to all the rents and profits of the property; for it remains virtually his, until he has failed to fill his contract.
When the indebtedness secured by the trust deed has been paid, the trustee must at once execute a paper known to law as a Release Deed. When recorded this instrument discharges the lien.
AS TO MORTGAGES
Mortgages are of two kinds, real and chattel. The first is a lien on real estate, the second on personal property.
A mortgage may be defined as a conveyance of property, personal or real, as security for the payment of a debt, or it may be given as a guarantee for the performance of some particular duty.
When a mortgage is given as security for the payment of a debt, the rule is to give a note for the payment of the amount involved. The mortgage becomes in this case the security for the note's payment.
In the body of the note it must be stated that it is secured by mortgage.
The date of the note and mortgage should be the same.
The man who mortgages his property is the mortgagor.
The man to whom the mortgage is given is the mortgagee.
The form of the mortgage is the same as that of a deed, except that it contains a clause called the Defeasance, which states that when the obligation has been met the document shall be void.
MORTGAGES MUST BE RECORDED
The forms for "signing, sealing and delivering" a mortgage, are the same as with a deed.
A mortgage must be recorded the same as a deed, the mortgagee paying the fees.
Chattel mortgages are filed and recorded in the same way, except that it is not usual to make copies of the instrument. They are described in books prepared for the purpose.
A wife need not join her husband in making the note secured by a mortgage, but if she agrees to the transaction it is necessary for her to sign the mortgage; however, some states do not require this.