scottb, post: 408694, member: 2124 wrote: Mortgage surveys in Montana are an interesting proposition, and one that I think has fallen victim to what I think of as a "Mortgage Survey"., which was a very casual survey, house on correct lot, any obvious encroachments etc.
Montana subdivision and platting act has an exemption from subdivision review specifically for "mortgage surveys". being
found in 76-3-201(1)(b) which states " subject to subsection (3), is created to provide security for mortgages, liens, or trust indentures for the purpose of construction, improvements to the land being divided, or refinancing purposes:"aforementioned (3) states An exemption under subsection (1)(b) applies:
(a) to a division of land of any size
(b) if the land that is divided is not conveyed to any entity other than the financial or lending institution to which the mortgage, lien or trust indenture was given or to a purchaser upon foreclosure of the mortgage, lien or trust indenture. A transfer of the divided land, by the owner of the property at the time that the land was divided, to any party other than those identified in this subsection (3)(b) subjects the division of land to the requirements of this chapter.
(c) to a parcel that is created to provide security as provided in subsection (1 )(b). The remainder of the tract of land is subject to the provisions of this chapter if applicable.Now it is my thought this Montana Code was to specifically protect the lender with out the land owner being subject to the expense of a subdivision review.
Yet the last two surveys I provided land owners using the above exemption have been rejected by the banks. The first time,the lady told me they no longer accept "mortgage surveys" , that the laws have changed and they no longer are allowed. I asked where this ruling came from came from and was told she was unsure, it may have been the Dodd-Frank bill, but she did not know, they just don't except mortgage surveys. I checked with another lender and I was told yes they still accepted them. A second client asked later asked for a survey to obtain a loan for the house he was building on his land and his lender (the second lender) mentioned above. I thought a survey using the said exemption was good to go, only to find lender two was now no longer accepting these surveys. When I spoke with him, what he told me is that the large lenders prefer not to lend on construction loans to individuals, and he thinks they companies are using this as an excuse.Now I am totally confused, and haven't had any luck in speaking with fellow surveyors as to whether of not they have had the same experience. I believe the Montana laws have been confused with the dratted Mortgage Survey of yore.
This is a good example of conflating terms in land surveying.
I don't know how many states have an exception to the subdivision rules called Mortgage Surveys, I do know Montana and Wyoming do.
They are exceptions to the subdivision regulations that allow a small parcel out of a larger one to be cut out so the bank can loan a reasonable amount of money.
They don't want to mortgage a deed of 500 acres for a house or barn construction or maybe a remodel, so the idea is to cut out a reasonable parcel from the large one (maybe 5 ac.) and loan the money for its value.
Montana requires a COS to be filed and of course easements for power, access, ect.
Wyoming is way more lax, just a legal and many times a 1/21/41/4 is all that's necessary.
Montana has a 160ac. minimum standard to exclude subdivision regulations and Wyoming is mixed by county from 35-160ac. A list of exceptions is in the statutes that include family, DOT parcels, utility, cemeteries, Mortgages.......
That is a Mortgage Survey by statue, but land surveyors usually call Mortgage Surveys the thing that shows if the house is violating setbacks and such.
We used to call them Lot Certifications and did probably 5 a week. Title insurers started to write survey exceptions into title insurance and that effectively ended those surveys in this part of the country. I'm not real sorry to see them go.
Back in Missouri there were guys that built empires on these. Some crews had no metal detector and no instrument in the truck and cranked out 12 or more a day. A handful of operators refused to cut the corners and did a better job.
The Board eventually required the statement "THIS IS NOT A SURVEY" on the map. I haven't done one since 1997 or so, and don't miss them.
I never understood the difference between a "Mortgage" Survey and a regular "Boundary" Survey; so, I always bid them as such. (and didn't get a lot of them).
Title companies around here always want the surveyor to write a new legal description. They base their coverage on the "new" legal. That way if there is a title insurance claim, the surveyor is liable. (at least partially). It is a disturbing practice that I fight against. The problem is that other surveyors don't even hesitate. I've seen surveys where the original legal description isn't even referenced.
There are so many properties that have not actually been surveyed in the last 50+ years and up until the 1990s most people went to local Banks and Savings and Loan or VLB to finance and no survey was hardly required.
With the collapse of most of Savings and Loans, the new financial institution is usually in another state and they want to know and request a survey showing all improvements and utilities and access.
The quality of product falls somewhere between a cloth tape location placed on a deed sketch map to a full blown new survey made as accurately as possible.
JOHN MACOLINI, post: 408726, member: 7340 wrote: "...the buyer that walks away from the mortgage still has to rent or pay for housing someplace else."
In Maine it takes years for foreclosure proceedings to complete. I know of one family in town who stopped paying their mortgage in 2009 and stayed in the house until they were finally evicted in 2013.
Does Maine actually still do Mortgages? I mean literally. Mortgage is still said by most people even though here the Deed of Trust is the reality.
Mortgages fell out of favor because it is a two party document which requires a Court to forclose. Deed of Trust is a three party document which is much easier to foreclose.
Thanks everyone for your feedback. I'm surprised at how much practices vary by location. Here in Alaska a lot of these are still done. It's particularly surprising to me that in some jurisdictions lenders/title insurers require them almost 100% of the time, while in others, they are required almost never. I find it hard to believe that lenders'/insurers' appetites for risk really vary that much. That sort of leads me to believe that Knud had it right. When these mortgage location surveys do disappear from a market, no one gets hurt except the buyer.
