Mortgage/ Land Finance

Question 1

Mortgage is a union of two elements

Answer 1

a debt - represented by a note and a voluntary transfer of security interest (lien in debtors land) to secure or collateralize

Question 2

Creditor

Answer 2

mortagee

Question 3

Debtor

Answer 3

Mortgagor

Question 4

Purchase-Money Mortgage

Answer 4

extension of value by a lender who takes as collateral a security interest in the very real estate that its loan enables the debtor to acquire

Question 5

Non-Purchase Money Mortgage

Answer 5

made/make a lien in Blackacre to secure a debt encumbered by the debtor for purposes other than making a purchase of the parcel (lien to finance education)

Question 6

Writing

Answer 6

Mortgage must be in writing to satisfy the SoF (legal mortgage)

Question 7

Legal Mortgage

Answer 7

on the exam they could describe different writing instruments that authenticate mortgage (choose to call it a Note, mortgage deed, security

Question 8

Rights of Parties

Answer 8

Once a mortgage is created (unless and until forclosure, the debtor has right to title and possession)
- creditor-mortgagee has a lien –> right to look to blackacre of default on the loan

Question 9

Transfering Interests - creditor-mortgagee

Answer 9

1) indorse the note and deliver to transferee

2) or by executing a separate document of assignment of intersts lien on black acre

Question 10

If note is indorsed & delivered, transferee is eligible to become a Holder in Due course

Answer 10

take gets to take note free of any personal defenses that original debtor-mortgagor could have asserted against orignial creditor/mortgageee

Question 11

Personal defenses

Answer 11

lack of consideration, fraud in inducement, waiver, estoppel, and unconscionability

Question 12

Holder in due course still subject to real defenses that debtor-mortgagor might raise

Answer 12

MADFIFI

1) Material Alteration in instruments
2) Duress
3) Fraud in Factum
4) Incapacity
5) Infancy
6) Insolvency
7) illegality