nominee agreement/tenants in common
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nominee agreement/tenants in common
Does someone have to be vested in title, in order to refinance, if there is a nominee agreement?
Asked on May 19, 2009 under Real Estate Law, Michigan
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 15 years ago | Contributor
Typically, if a buyer ("Principal") wants to remain anonymous he must set up the transaction by purchasing the property through a nominee. There are two basic structures for nominee transactions. In one, the nominee enters into a contract to buy the property and then assigns the contract to the Principal, and the Principal, not the nominee, closes on the purchase and takes title ("pre-closing assignment"). With the other structure, the nominee takes title to the property and later conveys title to the Principal ("post closing transfer").
I don't undertand then why the Principal does not have vested title by now. If this is a refinance, that means that there is already financing in place. How was that accomplished? No lender that I know of will lend to someone against property they do not own.
There is obviously something that I am missing here. Perhaps if you could give more details of the specific transaction I could be of more help.
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