Distinctions among the Real Estate Contract, a Deed, and Mortgage - Essay Example

On the other hand, the freehold category for real estate involves fees and life estates.

Additionally, this type of real estate includes freehold easements. A real estate contracts involve the consent of two people. Frank and Bahaudin assert that real estate agreements must be in writing for them to form a binding contract (32). This condition is fundamental in case of any litigation. A mortgage refers to a document given by a lender of property, especially land, to create a lien on a particular piece of land. A mortgage involves two parties to the mortgage contract.

These are the mortgagee and the mortgagor. The mortgagor is the borrower while the mortgagee is the lender of the property in the quest. A mortgage contract also involves mortgage transfers, which are contacts involving banks. There are conditions, which must be fulfilled before a mortgage contract is enforceable in law are that the contract must be in writing. The particular document, which is used in the transfer of a mortgage, is called an assignment of a mortgage. According to Frank and Bahaudin, the mortgage contract gives the mortgagee the right to dispose of the property in the event the mortgagor fails to cover the property debt (47).

In a mortgage contract, either the mortgagee or the mortgagor about the theory applied can hold the title of the property. In the case of a title theory state, a borrower transfers the title to the lender throughout the loan. Conversely, a lien theory state is a scenario in which the buyer of the mortgage holds the title of the property in the quest. A mortgage is different from a deed on the issue of foreclosure. The document relating to the closure of escrow differentiates a mortgage from a deed.

A covenant entails a pledge of property to secure a loan. In this regard, it is almost similar to a mortgage. A covenant involves trust and a beneficiary. In this case, the tutor is the borrower while the beneficiary is the lender of the property. The beneficiary is also known as a trustee, who holds legal title to the contractual property. The beneficiary helps in the selling of property, especially at auctions.

The trustee can resort to the move when the borrower fails in his obligation to pay due payments. A covenant ought to be honored upon transfer to form an enforceable deed contract. The document in which the deed contract is recorded is called an assignment of deed of trust. A covenant also involves both non-judicial and judicial foreclosures (Frank and Bahaudin 68). In the former case, the lender can indulge in foreclosure without the involvement of the court in case the contract contains a clause of power of sale.

However, non-judicial foreclosures are quick when they are compared to judicial foreclosures. How has the law in the United States caught up with technology when it comes to the making of contracts? The United States contractual law has been developed in tandem with technological advancements. Technology has made the preservation of evidence better than before. For instance, a mortgage comprises two parties to the contract while a deed involves three parties to the deed contract. The deed contractual parties include the borrower, the lender, and the trustee.

In this case, the trustee is a neutral party who is responsible for holding the title until the full debt is fully paid.