Protect Your Private Money Note

If the property is foreclosed upon, the recorded debts associated with the property are paid off in lien position order. If there happens to be an existing mortgage recorded against the property at the time a private money note is issued with a mortgage recorded, that note would be paid with funds after the first mortgage balance was repaid. In a foreclosure situation, there may not be enough funds to cover the outstanding balances of second or third-position liens.

The only way you can guarantee the funds you are lending is by having a private lender title insurance policy issued to the lender at closing.

In most cases, the borrower pays the closing costs associated with obtaining a private lender title insurance policy.
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The chances of a claim are so little because of the curative work IRA Title Pro real estate closing specialists do from the time they receive your title order until closing. Every property has title items that need to be cleared. The IRA Title Pro team insures a clear and marketable title prior to closing to avoid potential issues. Without a private lender title insurance policy, our team cannot perform this work and the risk falls solely on the lender.

Yes, you could save money on the local and state transfer taxes and recording fees. However, the loan funds and security interest in the property could be at risk.