mortgages Flashcards
future advance mortgages
a secured line of credit
obligatory v. optional future advanced mortgages
obligatory requires all requests; optional means left to creditor’s discretion
priority for obligatory future advance mortgages
date of issuance and recordation
priority for optional future advance mortgages
other interests can be imposed before banks loan outs but only if the creditor has actual notice (majority); minority jurisdictions does not require notice.
optional, “good-faith” reason
a lien on the mortgage is sufficient business decision
three mortgage theories
lien
title
lien –> title upon default
Due-On-Sale Clause
Gives the mortgagee the option to require that the entire debt be due and payable upon any transfer (enforceable if in the mortgage)
pre-payment mortgage
typically not allowed and if it is fees are permitted
when the mortgagor takes a deed instead of foreclosure
junior loans are unaffected
redemption effect
only effects the senior priority or the person you redeem from; the junior interests remain. if the mortgage remains in the effect after the redemption, all creditors remain.
effect of signing mortgage but not the note?
the mortgage means you are liable for foreclosure; but do not have to pay for the deficiency attributed to the note
modification and priority
the mortgage as modified retains its priority as against a pre-modification junior lienor except to the extent that the modification materially prejudices that lienor. As a general rule, an agreement to extend the maturity date of a mortgage is not considered to be prejudicial to a junior lienor.
effect of notice-record statutes on mortgages on mortgages issued at the same time
no effect, only race has an effect, so they are considered to have equal priority
