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Five People To Know When Buying A Home
For those people that are looking to purchase a house, there are a five key people that they will have to know in order to make the home buying process go as planned. I will be explaining them throughout the course of my article and giving their purpose in the home buying experience.
The first person they will have to know about is the Trustor. The trustor is the mortgagor or the company that well be taking out the mortgage. In the real estate language of trusts, the mortgagor is referred to as the trustor, or settler, because it is their responsibility to act (here to make the monthly payment to the trustee for the benefit of the beneficiary) pertaining to the trust.
The second person they will have to know about is the Beneficiary. The Beneficiary is the mortgagee. In the real estate language of trusts, the mortgagee is referred to as the beneficiary because they get the benefit of the trust (here, the receipt of the monthly payments made by the trustor/mortgagor).
The third person they will have to know about is the Trustee. The trustee is the only party introduced by the deed of the trust who does not have a similar counterpart in the typical mortgagee-mortgagor transaction. The trustee is an independent third party bound by the provisions of the trust to act in a fiduciary capacity to both the trustor and the beneficiary of the trust. However, since the trustee’s role is the typical real estate transaction is: (1) to collect payments from the trustor and forward them to the beneficiary; and/or (2) upon default to conduct the foreclosure sale to maximize the interest of the beneficiary, the trustee’s real interest lies with the mortgagee-beneficiary and, thus, the trustee frequently is, and should always be thought of as, an agent of the mortgagee-beneficiary. Indeed, in most deeds of trust, the trustee is selected by and can be replaced at any time by the mortgagee.
The fourth term the buyer will have to learn about is the Title Company. The title company is also often referred as the title insurance company. A title insurance company guarantees title to a piece of real estate. So once the trustor, trustee and beneficiary have all come to terms on the asking price for the property, the title insurance is drawn up to protect an owner’s or lender’s financial interest in real property against loss due to title defects, lies or other matters. It will defend against a lawsuit attacking the title as it is insured, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy.
Finally the fifth term a home buyer will need to know when purchasing a home or property is the Escrow Company. The escrow companies are also commonly used in the transfer of high value personal and business property. They are typically the companies that will draw up the mortgage plans for the purchase that you will be making wither it is for a home or business. But something the buyer needs to look out for is to use a licensed escrow company. These companies are regulated by national or state authorities and are required to have bonds that ensure customers can recoup money lost in the escrow process.
Through these five terms and knowing the purposes of each of them the buyer will have a better understanding of the purchase they will have to make. Because in the end the person that will have the most to lose if the loan defaults is the mortgagor, or trustor. When they signed with the escrow company to have the title drawn up for the mortgage they made a promise to make the payments that as its stated in the mortgage.