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Common Security Interests in Land

3. What are the common types of  “security interest in land”?

Land or real property is an expensive asset that is often purchased through financing arrangements. As such, purchases of real property are often subject to a security interest. The most common forms of security interest in land include:

•    Mortgages

•    Deeds of Trust

•    Land Sales Contracts

Each of these arrangements demonstrates the core principle of security interests. That is, there is an obligation (generally to make payments) that is secured by an interest in the real property. Each of these types of security interest is discussed in greater detail below.

•    Discussion: Why do you think that most real estate transactions throughout the United States are made pursuant to a secured transaction? How do you think this reality affects the price or real estate and the lending habits of financial institutions? Do you understand the role of secured real estate lending had on the economic recession of 2008?

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