By THE HOA ADVISOR BY MICHAEL CHULAK
QUESTION: I am seriously considering investing in short term notes secured by deeds of trust. What documents should I receive from the mortgage company?
ANSWER: You should receive all of the following: ■ A copy of the borrower’s loan application, property appraisal, credit report and any other available documentation that would help you in making an informed investment decision. ■ The recorded deed of trust. ■ The original promissory note. ■A policy of title insurance that guarantees title. ■ A hazard insurance policy with a Loss Payable Endorsement Clause in your favor. ■ A recorded assignment of the note and deed of trust. ■ The services of an escrow, which will make certain that all of your instructions are fully satisfied before the transaction is completed.
QUESTION: As a condominium developer, I would like to point out that the present law in California discourages the building of condominiums and other developments with homeowner associations. The primary reason is that homeowner associations have up to 10 years to find construction defects and sue developers, architects, engineers and contractors.
Consequently, building homes that are included in a homeowner association has become very expensive due to the high cost of insurance and expensive litigation, which ultimately is passed on to the consumer.
As much as 50 percent of any financial settlement goes to attorneys and so called
Originally published in the Santa Monica Daily Press print edition on March 22, 2006. Read the original PDF.