I got fingerprinted by a police officer in mid February. It was the 7th time I’ve been finger printed by a governmental agency. The first time I was fingerprinted was for my own protection in elementary school, in the horrific and unthinkable event I was kidnapped I could at least be traced, something I’d recommend to all parents who haven’t done so. Every other time I’ve been fingerprinted it has been for the protection of the general public.

When I became a federally licensed pilot I was finger printed, as I was when I worked in a casino and had a 10 year background check done. I have also in the past exercised my 2nd amendment right to purchase a firearm and was finger printed to ascertain my ability to legally do so. Previously I sold cars in California and was finger printed by the State to protect buyers from unethical salesmen. In 2003 when I became a real estate agent I was finger printed to ensure I could uphold the ethical standards required to assist the public in what is for many the largest purchase they will ever make. Now, in February 2005, I officially joined the ranks of the 205,000 other licensed Notary Public’s in the great State of California. Why should any of this matter to you?

All of the above require the individual to display utmost dedication to the greater public good, while still allowing them to exercise their personal pursuit of life, liberty and happiness, but also require taking into account how those personal actions reflect on society in the process. This does not make me a better person than anyone else, but it does present some interesting consequences should I decide not to be. Were I to commit a felony (easier than you might think in real estate), I would not only be sent to jail, I would lose my right to vote or own a firearm, my pilot’s license would be revoked permanently by the FAA, the State of California would strip me of both my Notary Public commission and my Real Estate license for life, and I would lose all credibility in the chosen field I love. In a nutshell: I’ve got a lot to lose, so you can trust me not to lead you astray!

There are roughly 36 million citizens in California, and I now represent a very small part of the less than one half of one percent of Notary Public’s available to the general public. By law, a Notary Public must perform any reasonable and legal request for their services and can, but does not have to, charge for their services. The law states specifically that “fees charged (or not charged) should be consistent from customer to customer."

As a Notary Public, I have chosen not to charge for my services should you find a need for them for any reason. They include notarization of: Power of Attorney, Healthcare Directives, Certified Copies, Deeds and Grants, Homestead Declarations, Transfers, Jurats, Affidavits, Depositions, Oaths and Affirmations. To you, my loyal newsletter readers, I can now offer you this additional service free of charge as your trusted Realtor®. In addition to my free Notary services, I also provide to you, at no charge, full property reports on any property you own or wish to buy, maps of the local San Diego area, fax and copy service. I want to be your full service Realtor®. And just like any good infomercial: But wait! There’s more!

My dear wife Parker recently got her ASP (Accredited Staging Professional) certification and opened her doors as Plan B ReDesigns. Providing organizational, decorative, and Staging® services to clients throughout the county, she told me she will grant her services as a certified Home Stager® to any of my clients selling their home free of her consultation fee. Considering a consultation with her is $150, you’ve got lots to gain and little to lose by listing with me.

For those of you wondering what Home Staging® is, it is the process of setting up a vacant or cluttered home in a more visually appealing way to help it sell faster and for a higher price. Generally the increase in sale price far outweighs the cost of Staging® the home. How does she do it? Give her a call at 619-851-5656 or email her at parker@planbredesigns.com and ask her! You can also visit her web site: http://www.planbredesigns.com/. She’s definitely got an eye for detail and organization I only wish I had. Actually, I do have it now by proxy, since she married me.

Enough about us though, let’s get to the meat of what I wanted to talk about when I started this newsletter: Informing you about real estate. A week ago, I spent a wonderful afternoon lunch with a friend who recently decided to get into the real estate foreclosure market. I wish him well and offered to give him advice and information as he went along. I also told him that I hoped he was bringing along his steel boots because he’s walking into a minefield! It was at that point he began asking me questions -- lots of questions!

Now, I love it when people ask me questions, because I’m full of it. Information, that is. If you’ve got a question, feel free to email me at craig@craigmbeck.com anytime. It doesn’t even have to be real estate related. I love to teach and learn, so ask away. I’ll get you an answer either personally or will address it in a future newsletter article if I really like the topic.

Anyway, my friend and I were talking about issues relating to chain of title and ownership and he continually referred to “the mortgage” in the process. Now, I realize this may seem like semantics at best, but in California, we don’t use mortgages. Yes, yes, you hear all the time people talking about their mortgage broker, or how they have a burdensome mortgage, but in California, we use Grant and Trust Deeds, not mortgages. The reason for it, no surprise, is essentially to protect the individual’s rights. If there’s legislation out there that protects the public or the consumer, it’s probably a California law.

So what’s the difference? A great deal to the seller, lender and borrower depending on which is used. For simplification, I will compare Mortgages and Trust Deeds one important topic at a time. (For reference: A Grant Deed transfers property from one individual to another while a Trust Deed is a security instrument held for payment of a debt.)

Title: In a Trust Deed, bare title is taken by a third party trustee, giving them power of sale over the property, and is held until the loan is paid off whether by sale or refinance. At that point, the borrower, who has physical and legal possession of the property, receives a Reconveyance Deed from the trustee, relieving him of the specific debt. With a Mortgage, title is taken directly by the borrower and no trustee is involved. Why is the Trust Deed safer? Think of it this way: Bob wants to buy a house from Larry. With a mortgage, if Larry gives title directly to Bob, and Bob doesn’t pay him, Larry’s only recourse is to take Bob to court. If Larry instead uses a Trust Deed and gives bare title to a third party trustee, if Bob doesn’t pay, Larry simply informs the trustee that Bob isn’t paying. Then the trustee sells the home and Larry gets his money. Bob ends up with nothing. This is an extreme simplification of the foreclosure process, which takes roughly 4 months start to finish.

Statute of Limitations: In a Trust Deed, rights of the lender to seek repayment do not expire. In a Mortgage, if the lender does not sue within 4 years of nonpayment, the mortgage expires and the borrower is off the hook. Clearly, the lender benefits most by using a Trust Deed.

Remedy for Default: With a Trust Deed, the lender can choose either a Trustee’s Sale or a Judicial Foreclosure. A Trustee Sale, colloquially known as foreclosure, is defined by law to take exactly 3 months and 21 days with specific actions required. A Judicial Foreclosure, or court action, is a common remedy for a Mortgage default and there is no set time period, leading to long, drawn out court battles that may take years to complete. Why then would someone holding a Trust Deed consider the option of Judicial Foreclosure? Judicial Foreclosure allows for a Deficiency Judgment, which I will cover near the end.

Reinstatement: A Trust Deed allows for the borrower to reclaim his rights to the property up until 5 days prior to the Trustee’s Sale by paying all defaulted amounts, costs and fees. With a Mortgage, a borrower may reinstate the loan anytime before the gavel drops and foreclosure is approved by the court. As you may have noted above, Judicial Foreclosure could take years, while a Trustee Sale takes exactly 3 months and 21 days.

Right of Redemption: This one is the most important if you’re going fishing for foreclosure properties around the United States! With a Trust Deed, once the Trustee’s sale is completed, there is NO right of redemption for the borrower. A Mortgage, however, allows the borrower in default to redeem the property 3 months after foreclosure, if the sale of the property covers the loan due and any fees or costs. If the sale of the property does not cover the above, the borrower gets 1 year to redeem the property by paying off the loan and any fees or costs. So what does all that legalese mean? Essentially, you could buy a foreclosed home that was mortgaged and almost 1 year later be forced to sell back to the original owner because they were able to come up with the money to pay off the loan and costs. Be careful out there when buying foreclosed properties outside of California!

Deficiency Judgment: Finally, in a Trust Deed, if you default, a deficiency judgment can not be levied against you. This means that if you owed $450,000 in loans, fees, and costs of foreclosure and only $200,000 was gained from the sale of your property, that’s all the lender can get from you. They lose out on $250,000 in debt owed, even if you had five other homes and a million dollars in the bank! Your credit rating, however, takes it in the neck. A Mortgage does not protect the borrower this way. If the same scenario above occurred, they could go after any other assets and monies you have to satisfy the difference owed, hence a deficiency judgment. They could even force liquidation of assets to obtain these funds, your credit rating still takes it in the neck, and a personal judgment against you is good for 10 years!

Aren’t you glad you live in California where we use Trust Deeds, and not Mortgages??