Proof of Mineral Ownership for Mortgage Application

General Mineral Rights Discussion
1

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.

Jean

2

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.

3

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.

4

Dear Jean,

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.

Buddy Cotten

5

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.

6

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.

7