Documents & Instruments
Your Trust Deed investment will either be secured by a whole (only one lender or note holder), or a fractionalized (more than one lender or note holder, each lender owns a percentage). Secure Deeds recommends whole Trust Deeds unless you are investing with a family member or close friend. The documents and instruments will be substantially the same whether your investment is whole or fractionalized. When funding a loan or purchasing a promissory note and trust deed you should receive: the promissory note; the deed of trust or an assignment of deed of trust; the preliminary title report; the appraisal or other evidence of value; property tax records; the loan application and related supporting documents from the borrower; compliance with Truth in Lending laws (disclosure to borrower) and the policy of title insurance.
In addition, you should receive a summary or lender disclosure statement with a description of what you are investing in. The lender disclosure statement should include: mortgage broker's name and contact info; borrower's name and contact info; subject property address; loan amount; interest rate; term of the loan; payment amount; lien position; appraised or tax assessed value; property tax statement or history; credit report (if one was pulled); borrower financial statement or income documents; and copy of fire insurance policy (except bare land). These items are all important parts of the transaction and reducing the risk to the investor. Any questions on these should be directed to the mortgage broker.