Delivery of the Deed, Mortgages, and Land Contracts Flashcards
What does delivery of the deed do? What else is required?
Makes the conveyance complete. Also required to have intent that is transfer immediately.
Who can a deed be delivered to?
Delivery can be to the grantee or to an escrow agent to hold until payment is made.
What is delivery (in terms of the delivery of the deed)?
To deliver a deed of land, it is not necessary that the deed be handed over to the grantee. Delivery means no more than act that evinces an intent to be immediately bound by a transfer. Delivery can be physically handing over the deed, but it can also be the grantor’s declaration, express or implied, that he is bound by his deed.
If a grantor intends to pass title to or future interest in the grantee now . . .
there has been delivery even though possession may be postponed until the grantor’s death.
If the grantor intends that no interest should arise until death . . .
no delivery during life has taken place and the deed cannot take legal effect at death because the grantor intended it to be a will. Instruments need to be executed with two witnesses in accordance with the statute of wills.
What are occassion arose in Rosengrant v. Rosengrant that do not constitute delivery of the deed?
Where a grantor delivers a deed under which he reserves a right of retrieval and attaches to that delivery the condition that the deed is to become operative only after the death of the grantors and further continues to use the rpoeprty as if no transfer had occured, the grantor’s actions are ntohing more than an attemt tto employ the deed as a will.
Who is the mortgagee?
The lender
Who is the mortgagor?
The borrower
What does a borrower give a lender to secure money for a home?
a note and a mortgage
What does the note do?
Creates personal liability but is unsecured. Allows the lender to go after the borrower for money.
What is the mortgage?
Allows the lender to sell (at a private sale or a judicially supervised sale, depending on jurisdiction) the property and apply the proceeds to the amount owed in the event of borrower’s default. Essentially puts the house up as collateral.
What if the value from the foreclosure sale is less than what was owed?
The note allows the lender to go after any difference through mechanisms like wage garnishment, levy, etc.
What is redemption?
the right to redeem oneself by bringing his/her payments up to date within a reasonable time.
What is the equity of redemption period?
Judicially created right to redeem. The mortgagee cannot askt he mortgagor to waive the equity of redemption. The equity of redemption is extinguished by the foreclosure sale.
What is the statutory right of redemption?
applicable in about half of the states. Statutory right of mortgagor to buy back the property from the foreclosure sale buyer within a specified time period ranging from three months to two years. Does not become operative until the borrower’s equity is extinguished at the foreclosure sale.
What is a deed of trust?
The deed is given to a neutral person to hold in trust to secure payment of the debt to the lender. If the borrower defaults, the trustee has the power to sell the land without going to court.
What is a power of sale mortgage?
A power of sale provision in a mortgage gives the lender the ability to sell the property without going to court, similar to a deed of trust, which makes the foreclosure sale more expeditious and inexpensive.
What is a judicial foreclosure?
a sale supervised by the court
Why does a bank prefer a judicial foreclosure?
It is easier for banks to get deficiency judgments against borrower (if sale is less than what was owed)
What is the goal of the foreclosure sale?
To make the lender hold. The mortgagee’s role on foreclosure is that of a fiduciary. The mortgagee has a duty to not act in bad faith nor fail to exercise due diligence with respect to protecting and preserving the mortgagor’s equity in the foreclosed property.
What is the measure of damages where due diligence is lacking?
the difference between the sale price and a fair price (not fair market value)
When will a foreclosure sale not be invalidateD?
For mere inadquacy, absent fraud, unfairness, or other irregularity
What are the borrower’s remedies in defective foreclosure sales that have occurred? That haven’t occurred?
Has occured: Seek to have sale set aside but would ahveto put the amount that was due in escrow
Hasn’t occurred: seek an injunction to prevent it
What does “subject to the mortgage” mean?
The seller’s existing mortgage loan remains intact. Sending money to a random person and trusting that person is sending it to the bank. May get benefit of lower interest rate that seller had than what would be on a new mortgage.
