Real Estate and Mortgage Closings
Property Title
In Massachusetts, it is required in real estate contracts that the title to the property sold be marketable. This means that the seller must have proof of title to all the property he or she is selling and that third parties not have undisclosed interests in the title.
A title insurance company or an attorney in Massachusetts is often employed by the buyer to investigate whether the title is, in fact, marketable. Title insurance companies also insure the buyer against losses caused by the title being invalid.
In order to pass title in Massachusetts, a deed with a proper description of the land must be executed and delivered. The deed must be officially recorded to establish ownership of the property and/or provide notice of its transfer to any subsequent purchasers.
Mortgages
A mortgage involves the transfer of an interest in land as security for a loan or some other obligation. It is the most common method of financing real estate transactions in Massachusetts and elsewhere. The mortgagor is the party transferring the interest in land, and the mortgage, which is usually a financial institution, is the provider of the loan which is given in exchange for the security interest. A mortgage is generally paid in montthly installments that include both interest and a payment on the principle amount that was borrowed. Failure to make payments results in the foreclosure of the mortgage. Foreclosure allows the mortgagee to declare that the entire mortgage debt is due and must be paid immediately. This is accomplished through an acceleration clause in the mortgage. Failure to pay the mortgage debt once foreclosure of the land occurs leads to seizure of the security interest and it's sale to pay for any remaining mortgage debt.
