Deed of Trust

Question: Some 'Exceptions and Exclusions' in the title policy, what does it actually mean? (See detail as quoted)

As quoted from the Preliminary title report:

" Covenants, conditions, Restrictions and Easements in an instrument recorded in book 4563 of Deeds, Page 131, any amendments and modifications thereto, which provide that a violation thereof shall not defeat or render invalid the lien of any first mortgage or Deed of Trust made in good faith and for value, but deleting any covenant, condition or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status, or national origin to the extent such covenants, conditions or restrictions violate 42 USC 3604(c)"

Answer: Put into plain English.

The first part notes that there are recorded Covenants to the property. Covenants are restrictions placed on lots in a development by the developer. For example, it may say that all homes have to be brick or that you can't have vinyl siding.

The last part notes, however, that certain covenants may be invalid under federal law. In the early 1900s, a lot of properties had covenants forbidding the sale of a lot to a racial minority. That type of covenant may be invalid.

The middle part notes that the covenants do not prevent a valid mortgage from foreclosing on the property.

What they really mean is that, you, as the buyer have the responsibility to check with your recorders office to find out what the covenants and restrictions associated with your property are. If you don't, then you aren't covered by the title insurance if they come back to bite you.

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