mortgages Flashcards

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1
Q

mortgage

A

a security interest in land that serves as collateral for the repayment of a loan; must be in writing to satisfy SoF

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2
Q

lien theory (majority)

A

mortgagor has title and the right to possession absent foreclosure; mortgagee has a lien, conferring a right to take action for ownership of the land if the mortgagor defaults on the loan

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3
Q

title theory (minority)

A

mortgagee has title to the property during loan term, not mortgagor-borrower

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4
Q

intermediate theory (minority)

A

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

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5
Q

equitable mortgage

A

debtor gives creditor a deed to his land as collateral for the debt

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6
Q

mortgagor

A

debtor/borrower/landowner

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7
Q

mortgagee

A

creditor

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8
Q

acceleration clauses

A

terms in loan agreements that require mortgagor to pay off full loan immediately if certain conditions are met, e.g., if mortgagor misses too many payments

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9
Q

mortgagor transfer

A

where mortgagor sells property, mortgage remains on the land; mortgagor remains liable to mortgagee for the loan

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10
Q

how mortgagee can transfer interest

A

1) endorsing mortgage note and delivering to transferee
2) executing a separate assignment of the mortgage interest

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11
Q

holder in due course

A

takes a mortgage note free of any personal defenses mortgagor could have raised against original mortgagee

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12
Q

requirements for holder in due course status

A

1) negotiable note payable to named mortgagee
2) indorsed
3) delivered
4) good faith and value paid

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13
Q

redemption in equity

A

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

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14
Q

deed in lieu of foreclosure

A

to avoid foreclosure, mortgagor can agree to give mortgagee deed to property; such transactions will be valid as long as they are fair and reasonable

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15
Q

mortgagee possession

A

lien theory = no right to possess before foreclosure

title theory = right to possess at any time upon demand

intermediate theory = right to possess upon default

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16
Q

priority of creditors

A

creditors must record their interests; recorded interests take priority in the order recorded

17
Q

purchase money mortgage

A

mortgage given in exchange for funds used to buy the property; superior to all interests

18
Q

effect of foreclosure on interests

A

junior interests = terminated by foreclosure of a superior claim

senior interests = unaffected by junior interest foreclosures