Legal Question in Real Estate Law in North Carolina

My Dad has a house with a mortgage. He is considering taking a short term loan (one year) from his brother and the brother wants to take a secured interest in Dad's house to ensure his principle. There is substantial equity to cover much more than the mortgage and the proposed loan. The question is "does the new loan have to be recorded to ensure the validity of the brother's claim to a secured interest?" Dad has no problem with giving his brother a secured claim but he doesn't want to file / record the debt. Thank you


Asked on 10/14/12, 10:14 am

1 Answer from Attorneys
Jeff Rosner Rosner Law Firm P.A.

Yes - a promissory note should be drawn up evidencing the loan and a deed of trust drawn up which gives the brother a lien on the property. The deed of trust needs to be recorded. Also it may be worth it to make sure this loan is exempt from the Secure and Fair Enforcement for Mortgage Licensing Act and that there is nothing that needs to be complied with.

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Answered on 10/14/12, 7:18 pm


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