Mortgages Flashcards
1
Q
What is Purchase Money Mortgage
A
- Money you use to purchase the property
- It always gets priority to get paid back
2
Q
What is redemption?
A
Paying off debt to prevent foreclosure
3
Q
What is equitable right of redemption?
A
- Time from Notice of foreclosure to Sale
- Can NEVER be waived
4
Q
What is statutory redemption?
A
- Period of time AFTER foreclosure sale
- Statutory redemption is not automatic (by statute)
5
Q
What is Lien Theory?
A
- Bank (Mortgagee) ONLY has a lien on the property
- Mortgagor holds legal title
- Mortgagor can sell property (but Bank is expected to be paid off the remaining)
6
Q
What is Title Theory?
A
- Bank OWNS property
- Mortgagor only has equitable interest
- you CANNOT sell unless you pay everything off
7
Q
What happens to Joint Tenancy if we take out a mortgage in Lien AND Title Theory?
A
- lien theory: Nothing happens
- title theory: joint tenancy is severed (into tenancy in common)
8
Q
What does it mean to assume the mortgage?
A
- new buyer takes over payment
- original owner secondarily liable unless novation
9
Q
What does it mean to take house subject to the mortgage?
A
- original owner liable for payment
- BUT bank CAN foreclose on the house (even though new owner did nothing wrong)
10
Q
What is Deed in Lieu of Foreclosure
A
- Sign deed to bank and skip foreclosure proceedings
- “Take it, bank!”
11
Q
If there’s a foreclosure, and there are other mortgages I took out AFTER, these mortgages are…
A
Wiped out if 1) given notice and 2) joined the suit
12
Q
If there’s a foreclosure, any loans taken out BEFORE the foreclosure will…
A
- Stay
- the buyer would be taking “subject to” the sale and the original guy would still owe them
13
Q
What is Deficiency Judgment?
A
- Collect the remaining money not recovered by foreclosure sale from owner
14
Q
What is Installment Land Contract?
A
- no title given to owner until all payments made
- if buyer defaults, seller can take back unless foreclosure proceeding rules supersede it
