Posted by Elvis on March 13, 2008 at 20:18:49:
Thank you for your response.
I could of sworn that my purchase agreement did in fact have and/or assigns, but in looking over it I find that it does not. For the record, this deal closed about 2 years ago so it’s water under the bridge. However, the question has been bugging me since the day the agent asked if I wanted title insurance and I wasn’t sure what to say. I ended up saying no, since I knew my buyer would be getting their own title insurance.
So, I signed an agreement with the seller, and signed the identical agreement with my buyer/investor. I used my buyer’s sales agreement (slightly modified to reflect me as the first buyer).
>They will pay you a commission presumably above and beyond the amount your agreement says you are purchasing the Note for.
Yes, except I had the investor make one payment to escrow for the note, and one to me outside of escrow for my fee.
>This will then also allow for full disclosure of what all parties are making - especially if you run the funds through the escrow.
That doesn’t make a whole lot of sense to me, and precisely why I had payment sent outside of escrow. If my seller were aware that I made the insane fee of 3 whole percent, he would of had a conniption fit and jeapordized any future business. Further, you’re right the title/escrow company felt the need for full disclosure to the seller, even though there were two seperate transactions taking place, one not involving the seller. Precisely why I had it done the way I did it. How the escrow agent can disclose my transaction with my buyer, to the original seller and still maintain their license is beyond my understanding. Perhaps I should of sued.
After reading your response several times, I’ve finally come to realize that I did not in fact need title insurance, the insurance follows the note holder. Once I give up possession of the note, in theory there’s nothing further for me to worry about.
Finally,
>2) An alternative way to operate- using the same Note purchase agreement as above. You initally have the Note and Mortgage Assigned to YOU. Thus you are acting as a principal…
>You then Assign the Note & Mortgage to your “JV” partner or end buyer. They pay you and then YOU pay the Note seller (the original Assignor of the Note). No fee disclosure will be needed this way especially if all you contribute to the escrow are the funds necessary to take care of the original Note seller.
This implies my note buyer pays me outside of escrow, prior to my owning & selling them the note, and my seller selling me the note without my having paid for it. I can’t see how or why either party would do that.
I guess I don’t understand what you’re saying. I do however think I now understand the title insurance part, so thank you for that.