Mortgages

Question 1

a mortgage is

Answer 1

a conveyance of an interest in RP made to secure performance of an obligatio. Usu evidenced by a mortgage deed and a promissory note

Question 2

a mortgage deed is

Answer 2

doc that conveys an interest in RP designed to secure performance of a debt.
The mortgagor gives it to the mortgagee.
Is recordable

Question 3

a mortgage deed must have

Answer 3

ID o f parties
description of prop (sufficient to give a BFP notice)
intent to create a security interest

Question 4

the mortgage note creates

Answer 4

personal liability in the mortgager.

Question 5

In MD: when a mortgage is executed, mortgagee gets __ and mortgagor gets __ bc MD uses __

Answer 5

title, but for security purposes only. Can’t take possession or collect rent

possession, right to collect rent, is considered the owner of the land

modern title theory

Question 6

in a lien theory juris, mortgagee gets ___, mortgagor gets ___

Answer 6

mortgagee gets a lien

mortgagor keeps legal & equitable title, possession

Question 7

in an intermediate theory jurisdiction,

Answer 7

mortgagor keeps legal title

after default, legal title and possession pass to the mortgagee who may then begin to collect rents and profits

Question 8

mortgagor or LT commits waste if, without the mortgagee’s consent, he

Answer 8

My rubbish makes the castle ruined

• mortgage (fails to make timely payments of prop taxes or governmental assessments secured by a lien that have priority over the mort)
• makes phys changes to RP that decrease the value
• fail to maintain and repair
• fail to comply materially w mortgage covenants
• retains rent which the mortgagee has a rt to

Question 9

a judicial foreclosure sale must be

Answer 9

public
properly noticed
reasonable manner
fair price

Question 10

proceeds of a foreclosure sale go to:

Answer 10

costs of the sale
security interest foreclosed
junior lienholders terminated by the sale
mortgagor

Question 11

priority: lien vs purchase money mortgage

Answer 11

purchase money mortgage

even if lien was recorded first

Question 12

priority: junior mortgage vs a prejudicially modified senior mortgage

Answer 12

junior mortgage

Question 13

if the mortgagor transfers the property subject to the mortgage, and mortgage payments are not made, the mortgagee may

Answer 13

foreclose

transferee does NOT have personal liability for the debt

Question 14

if the transferee assumes the mortgage, and mortgage payments are not made, the mortgagee may

Answer 14

foreclose

transferee IS personally liable for the debt- may be liable for a deficiency

Question 15

novation

Answer 15

transferee of RP and mortgagee agree that the xferee will assume the mort
mortgagor released from liability

Question 16

if the mortgagee transfers his interest in the property, and the note is negotiable, and the transferee qualifies as a holder in due course,

Answer 16

takes it free and claer of “personal defenses” such as lack of consideration, duress by nonphysical threat, fraud in the inducement.

does take subject to “real” defenses- infancy, duress by phys threat, fraud in the factum

Question 17

in a deed of trust, the debtor/ note-maker is the ___, and gives teh deed of trust to ___

in the event of the default..

deeds of trust are generally treated like __

*deed of trust is an alternative to a mortgage

Answer 17

in a deed of trust, the debtor/ note-maker is the settlor, and gives the deed of trust to a trustee closely connected to the settlor.

in the event of a default, the trustee is directed to conduct the foreclosure sale,

deeds of trust are generally treated like mortgages.

Question 18

mortgage alternatives: in an installment land-sale K

Answer 18

buyer takes posession, makes payments to seller

seller delivers a deed and legal title only when payments have been completed.