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Buying or Selling a Home/Title Company or Private Attorney to handle transaction.


I live in Texas and want to loan $20,000 to a friend so they can pay off their mortgage and equity loan held by their mortgage company.  The house is valued at $120,000.  Will a title company handle this type of transaction which will provide legal documentation that releases and records their current mortgage lien, provides a Promissory Note for the $20,000 as well as a document that secures the note with the property in case my friends can't repay me?  Most attorneys could handle this but Title companies do this day in and day out and could do it cheaper.  I am not buying the house just loaning them the money to payoff their obligation.

There's lots more to this than you perhaps realized, Raul. First of all, you have to make sure you are familiar with the Texas law regarding mortgages (trust deeds) and foreclosures. The law is somewhat slanted towards to the lender, but you as the lender should know all about it, just in case the borrower goes awry with his payments.

Yes, you can probably have it handled with the title company and its attorney. I'm not familiar with their fees, but it should be nominal. They would take care of the necessary documents, promissory note, etc. But you should be aware that the Federal government recently passed a new law that you'd want the title company to explain to you how it would affect you in your position as a "hard money" lender. For example, you may not require a "balloon" in your schedule of payments. So, be sure they do inform you completely.

The title company will inform you if there are any other liens against the title of the property. You want the most security you are allowed to have. That means you want to be in primary lien position as much as possible. I do wish you well.

Dick Dennis

Buying or Selling a Home

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Dick Dennis


With more than 41 years as a real estate broker, I can solve most any problem presented. If I can`t, I do my research. Problems with mortgages, trust deeds, foreclosures, odd ways of conveying titles. Most any good Realtor can answer questions satisfactorily, but I answer questions that most cannot. Also, ask about my hard-copy newsletter, The Landed Gentry. It can also be sent to you via PDF.


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