Mortgages

Question 1

Mortgages: Intermediate lien theory

Answer 1

Morgagor has title and right to possession until default occurs per the mortgage; after default, mortgagee has title and right to possession

Question 2

Mortgages: Equitable mortgage

Answer 2

Debtor gives creditor a deed to his land as collateral for the debt (instead of executing a mortgage)

Question 3

Transfer of Mortgage Interests: Mortgagor transfer

Answer 3

Where mortgagor sells the property, mortage remains on the land

If there is an assumption of the mortgage, original party is secondarily liable as surety

Question 4

Transfer of Mortgage Interests: How mortgagee can transfer interest

Answer 4

• Endorsing the mortgage note and delivering it to the transferee
• Executing a separate assignment of the mortgage interest

Question 5

Holder in Due Course: Definition

Answer 5

A holder in due course lender takes a mortgage note free of any personal defenses mortgagor could have raised against the original mortgagee (Lack of consideration, fraudulent inducement, etc.)

HIDC still remains subject to real property defenses (duress, fraud, etc.)

Question 6

Holder in Due Course: 4 requirements

Answer 6

1) Negotiable note, which must be:
2) Indorsed by, and
3) Delivered to the mortgagee, and
4) Good faith and value paid

Question 7

Foreclosure: Redemption in equity

Answer 7

At any time prior to a judicial foreclosure sale, mortgagor can redeem the property by paying the amount due

Question 8

Redemption in equity: Equitable mortgage

Answer 8

Redemption rights apply to an equitable mortgage situation where creditor appears to hold legal title to the land via a deed

Question 9

Redemption in equity: statutory right of redemption

Answer 9

Some jurisdictions allos mortgagor, for a certain period, to buy back the property after foreclosure sale