Purchasing a home involves a lot of paperwork and documents to be signed. Most people utilize a mortgage loan to finance the purchase. Generally, a buyer places a bid on the home he wishes to purchase. If the seller accepts the offer, the buyer will need to get a loan approved in that amount minus any down payment. When the transfer is complete, the seller must sign a warranty deed and the buyer signs a type of security instrument with intent to repay the loan. The state of Georgia calls this instrument a security deed, while others call it a mortgage or deed of trust.
Warranty deeds act to complete the transfer of property ownership, or conveyance. Usually, the seller is an individual or a building company. The seller is called the grantor on the deed. The buyer, called the grantee, is the person purchasing the home. The deed’s language conveys all ownership rights from the grantor to the grantee. When a warranty deed is used, there is also an implied guarantee that the grantor holds a clean title to the property. This warranty protects the buyer if a claim is made on the property in the future from a previous owner, creditor or lien holder. The seller can be held responsible to provide proof of a clear title.
When a mortgage loan is obtained in Georgia, a security deed must be signed at the time of the loan’s closing. This document states that the buyer, referred to as a borrower now, has taken out a mortgage loan for the property in question. The security deed clearly states all of the parties involved in the transaction, including the borrower's and lender's names. It also states the loan amount and its maturity date, or when it should be paid in full. The security deed further explains the terms of the loan, when payments will be due and what the conditions of a missed payment are. Overall, the security deed provides proof of debt and places a lien on the property. Once the loan is paid in full, the mortgage lender cancels the security deed and the lien is removed.
Security deeds stipulate the conditions of missed payments and the foreclosure process. Depending on the state in which the property is located, foreclosures may need to be mediated through the judicial system. However, security deeds do not require court interjection. When a security deed is signed, the lender can begin foreclosure without a court order. This expedites the process and eliminates legal fees for the lender.
Although security deeds and warranty deeds function in separate ways, both must be filed in the county land records system. This ensures that the proper information will appear on future title searches done on the property. In Georgia, the clerk of the superior court is responsible for recording and maintaining property records in each county. The documents must also meet recording requirements set by the state and county.
- Borrower's Guide to Private Money Loans: Mortgage Vs. Deed of Trust
- Document Systems, Inc.: Mortgage and Deed of Trust States
- RealEstateLawyers.com: Security Deed
- Mortgage Fit: Warranty Deed: Legal Doc That Conveys Clear Title
- Court Listener. "Henry Harvey v. Federal National Mortgage Association, 2015-CP-00134-COA (Miss. Ct. App. 2016)." Accessed Sept. 2, 2020.