Quote:
Originally Posted by CoachKandSportsguy
We all know that, its obvious. . .
CDD bonds are not quite mortgages, but from a payer's point of view, the bond looks like or behaves like a mortgage with amortization identical to a mortgage, the payment concept is the same as a mortgage, and a lien against the property with the ability to foreclose against the property, like a mortgage.
A mortgage is a legal agreement by which a bank or other creditor lends money at interest in exchange for taking title of the debtor's property. The bond holders do not hold title to the property, and do not lend you the money.
good luck.
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Thank you, I agree with you 90%.
You are correct, in that the "lender" does not have equitable title to the property, as they typically would with a mortgage. That said, property ownership rights are different in different states and not all mortgages grant equitable rights.
In the case of a Bond, the Lender did indeed lend money to the property owner. At the time, that owner was the Developer. The Developer then arranged for that loan to be assumed proportionally by the next owner (first home buyer), who could then pass it on to subsequent buyers.
Good language.
It generally behaves as a mortgage, with some idiosyncrasies (ability to assume, inability to prepay a portion of principal, no personal note attached, no direct refinancing available).
If a home sells for $400,000 + a $40,000 Bond Debt, the home really sold for $440,00.
Or you could say, it sold for $400,000 + yearly "land rental fee", similar to renting a site at a Mobile Home Park.
In either characterization, it's not like having Fee Simple Title, free and clear of all liens & encumbrances.
I don't often agree with CoachKandSportsguy, but he's got a way better grasp on this situation, than most everyone else.