I have been asked by our mortgage person to provide a document that shows "ownership" of my mineral rights. Tax forms and payment stubs will not suffice. I don't have a "deed" or "stock certificate" type document.
Has anyone else had this issue and been able to solve it?
Thanks very much.
There should be a deed recorded in your name in county records which would establish title. Otherwise the oil company would not be paying royalties. Offer tax statement for minerals.
That would be the contract in which you bought the property. Your property deed may be worthless for the purpose as it may not state including/excluding mineral rights. If minerals were never severed? It's hard to prove that something didn't happen, you would have to examine the entire chain of title.
At the time I was asked to provide a document showing ownership of the minerals I would have told them to exclude them from consideration unless you are using them to show income [uncertain at best], or financing more than the surface and any structures are worth.
I've performed this task many times. I think what the mortgage person is looking for is what I would call a Certificate of Chain of Title and all of the documents affecting your property during a certain time period are listed, along with copies of the documents.
An attorney can usually look at this, which sometimes would be described as a modified Abstract of Title and render an opinion as to the location of the mineral rights.
Aside from the bank's request for your mineral ownership information, I would recommend excluding the minerals from your mortgage if possible. Typical banks won't lend on mineral interest by itself, so why allow them to consume your minerals in a loan? No one ever plans to foreclose, but it does happen, and if your minerals are excluded from the note, at least you will retain ownership of them in the future.
agreed. If the mortgage is so close as to need the royalties, it might be better to pass on the mortgage, or borrow less. A banker would be foolish to lend against an variable income stream.