Today’s market environment has made it extremely difficult for sellers and buyers of real estate to consummate a transaction under normal procedures. Due to a severe drop in employment rate, tighter lending standards by mortgage companies, and the lingering effects of the recession on all aspects of the U.S. economy, sellers and buyers are resorting to alternative ways for a buyer to get into a house they can’t qualify for, or conversely, a seller to get out of a mortgage they can no longer afford.
A recent law passed by the Texas Legislature has quietly hit the books, one that promises to have a significant and adverse effect on Texas consumers’ ability to obtain financing for the purchase of residential property. The legislation serves to place further limitations on a prospective purchaser’s financing options, at a time when the current negative banking environment already has severely restricted the viability of real estate transactions.
Some good news: common sense is finally being applied to the implementation of regulatory restrictions on seller-financing.The Texas Land Title Association Department of Government Affairs has just issued this update:
Doug Foster, Commissioner of the Texas Department of Savings and Mortgage Lending, has written that the Department will continue to allow the statutory seller finance de minimis exception, which has long been allowed under Texas statute but had been placed in doubt since the recent passage of the Texas SAFE Act.
One of the most puzzling issues confronting Texas consumers when attempting to document a real estate transfer is deciding which type of transfer deed is appropriate to use. For generations, well-meaning advisors have unknowlingly led their questioners astray by repeating a well-circulated but extremely inaccurate mantra: In order to transfer title to real estate, the seller should give the buyer a quitclaim deed, often mispronounced a quickclaim or quick claim deed. On innumerable occasions, consumers have contacted my office asking for such a document, claiming that the county clerk’s office at the courthouse advised them to utilize this document. And the bad advice is not limited to just the non-attorney public. Many, many divorce lawyers and probate lawyers routinely subject their clients to potential title issues by including quitclaim deeds in their work product. How such misinformation and misuse has become so widespread is a mystery; however, Texas law is very clear that in most instances, a quitclaim deed is not appropriate, and could lead to future problems.