Other Legal or Equitable Interest Holders

There is a difference between having what is called legal title and equitable title. Equitable title means that you have the right to enjoy and use the property, while legal title means you own the property. For example, in a land contract, the seller sells the buyer the property and the buyer has the use and enjoyment of the property. Once the buyer pays the seller the balance of the purchase price for the land, the buyer now owns the legal ownership rights to the land. A beneficiary under a trust has an equitable interest. A trustee owns the legal title.

When a borrower takes out a mortgage on a property, the property is used as collateral for the loan. The owner retains legal and equitable ownership rights, and the lender has a security interest in the property until the borrower pays back the loan. If the borrower defaults, then the lender can foreclose and receive ownership rights and benefits to the property. The borrower no longer has any interest in the property after the redemption period passes, unless the borrower can prove there was wrongful foreclosure, fraud, or a mistake occurred.

State laws vary with respect to the way a judgment lien can be collected against a piece of real property. However, the process pretty much works like this. The person or entity who is awarded a judgment can obtain an Abstract of Judgment and record it in the county where the judgment debtor owns real property. A notice must be sent to the owner ...

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