3 Reasons Private Lenders Should Use Land Trusts

[00:00:00] Speaker A: You don't want your name attached to this mortgage. You don't want someone to know that you are the one who lent the money to this borrower to buy this property or refinance this property for whatever reason. Hey, this is Joe Siegel, your real estate entrepreneurial asset protection attorney in Florida, here to talk to you today about mortgage land trust. While you may know that land trust can hold land in trust, land trust can also hold any other interest in land in trust, and that includes mortgages. So we've been receiving a lot of calls about people wanting to put mortgages into a land trust. Why would you do this? Well, there's a few reasons why you would put a mortgage into a land trust and let a third party trustee hold it rather than you holding it in your name. Number one, you want the privacy. You don't want your name attached to this mortgage. You don't want someone to know that you are the one who lent the money to this borrower to buy this property or refinance this property for whatever reason. You just don't want people knowing that you have money enough to lend to people. Number two, maybe there are multiple lenders who have come together, you've all come together, and maybe there's three of you and each of you have a 1/3 interest in this mortgage. And it's just going to be too unwieldy to put all of your names as to a 1/3 interest undivided in that mortgage. It's just too big. And number three, it just makes it easier whenever you go to foreclose, should you ever have to do that, because then to go to foreclose, the only plaintiff is the trustee of the trust that holds the mortgage rather than all of these lenders names and also your name. I can't tell you how many times I've had private lenders contact me and say, hey, this mortgage foreclosure showed up on my credit report, but I was the plaintiff. I was foreclosing a mortgage that I held and they put it down as if I'm the one who got foreclosed. That does happen and now that person has to deal with that. But if you've used a mortgage trust, land trust to hold that mortgage, your name doesn't appear there. You don't sign the documents for the foreclosure. You don't, your name isn't in the foreclosure. So the chances of it being wrapped up into your credit report by accident or otherwise is not a problem. So always remember, you can also use a land trust to hold mortgages. They don't just have to hold land. And we provide that service if anybody ever needs it. We do mortgage trust. You can hold multiple mortgages in one land, in one mortgage land trust. There's no reason to do a separate land trust for each mortgage unless you have different lenders in the background, but as beneficiaries. But otherwise you can have as many mortgages held by one trust as you want because the liability is very low, provide you that anonymity, provides you that protection, that your name doesn't get wrapped into a foreclosure by accident and it just simplifies naming on the mortgage that it's the trustee of the such and such trust as the trustee of the mortgage. And that's it. It keeps keeps everything else about you out. So if you ever need that, give us a call. Otherwise, until then, trust this. [00:03:34] Speaker B: Thanks for listening to this edition of Trust this. If you got something out of it, please press like and subscribe and give us a five star review to help us reach others who can benefit from this series. Until next time, keep aspiring to a better life.