MBE Property V: Mortgages and Security Interests

Question 1

when can mortgagee take possession of real property under lien theory?

Answer 1

mortgagee cannot take possession prior to foreclosure; mortgagor considered owner of real property until foreclosure

Question 2

when can mortgagee take possession of real property in title theory state?

Answer 2

legal title is in the mortgagee until the mortgage has been fully satisfied. Thus, the mortgagee is theoretically entitled to take possession at any time, although the mortgagee is typically prohibited by the terms of the mortgage from taking possession of the property before default occurs

Question 3

when can mortgagee take possession of real property under intermediate title theory?

Answer 3

mortgagor retains legal title until default, and, upon the mortgagor’s default, it vests legal title in the mortgagee

Question 4

future-advances mortgage

Answer 4

mortgage given by a borrower in exchange for the right to receive money from the lender in the future. This type of mortgage is also known as a “line of credit

often used for home equity, construction, business, commercial loans