Mortgages

Question 1

Purchase Money Mortgage:

Answer 1

• Money used to purchase the property
• Always gets priority (ie: always gets paid back first)

Question 2

Redemption

Answer 2

• Paying off debt to prevent foreclosure

Question 3

2 kinds of redemption

Answer 3

Equitable
and
statutory

Question 4

Equitable Right of Redemption:

Answer 4

Equitable right of redemption is a defaulting mortgagor’s right to prevent foreclosure proceedings

Question 5

Equitable Right of Redemption time period

Answer 5

• is the Time period from NOTICE of the foreclosure until the foreclosure SALE

Question 6

Equitable Right of Redemption Waiver

Answer 6

EROR can NEVER be waived, if you come with the money at the last second before the sale, the bank has to take it

Question 7

Statutory Redemption

Answer 7

this is the period of time after the foreclosure sale until whenever (depends on the stt)

Question 8

Sttry redemption time period

Answer 8

the period of time to redeem beings AFTER the foreclosure sale

Question 9

automatic trigger differences between EROR and Sttry Redemption

Answer 9

EROR is an automatic right

sttry redemption is NOT an automatic right

Question 10

Two types of jurisdictions you can live in with a mortgage

Answer 10

Lien theory
and
title theory

Question 11

Lien theory

Answer 11

means the person who gave you the money only has a lien on your title, lien will be removed once you pay off the mortgage

Question 12

owners of the lien do not have;

Answer 12

• ownership of the title
• legal rights in the home

Question 13

Title theory

Answer 13

bank literally owns your property, you only have equitable interest to live there. once you pay off the mortgage, you gain title

Question 14

what happens to joint tenants when they take out a mortgage on a property in a title theory state?

Answer 14

The bank gains title, which counts as a conveyance of interest, severing the joint tenancy and reducing it to a tenancy in common instead

Question 15

Assuming a mortgage and taking subject to the mortgage

Answer 15

these are two different ways three party mortgage deals work

Question 16

Assuming the mortgage

Answer 16

• mortgage is assumable
• New buyer of the home takes over old owner’s mortgage payments
• new owner is now liable to the bank if he misses a payment

Question 17

for Assuming mortgages, can the bank go after the original owner for the second owner’s failure to make mortgage payments?

Answer 17

yes, the original owner can be held secondarily liable UNLESS old owner and the bank executed a NOVATION with one another

Question 18

Subject to the Mortgage

Answer 18

New buyer buys from original owner, original owner is still liable for payment of the mortgage, HOWEVER, the bank can foreclose on the new owner if payments are not made, even if the new owner did nothing wrong

Question 19

Deed in lieu of foreclosure proceedings

Answer 19

instead of going through the foreclosure proceedings, owner can give the deed to the bank right away and relinquish all ownership immediately

Question 20

What happens if multiple mortgages are taken out on a property when foreclosure occurs?

Answer 20

any mortgages that were taken out after the mortgage that is being defaulted on are eliminated, and any mortgages that were taken out before the mortgage that is being defaulted on remain

mortgages taken AFTER = wiped out

mortgages taken BEFORE = stay

1, 2, default on 3, 4 = 1&2 stay, 4 is wiped out

Question 21

What is a deficiency judgement?

Answer 21

Bank can Collect the remaining money not recovered by foreclosure sale from original owner (the one who defaulted)