Mortgages

Question 1

Mortgages & Promissory Note

Answer 1

Promissory Note: promise to pay + interest
Mortgage: if you can’t pay $ back, Lender has right to foreclose
promissory note & mortgage go together

Question 2

Purchase Money

Answer 2

Money borrowed goes to buy the house, ALWAYS HAS PRIORITY
- Loan to actually purchase land

Question 3

Assumable Mortgage

Answer 3

New owner becomes personally liable on the note
- NEVER ASSUME THAT NOTE WAS ASSUMED
- Buyer assumed mortgage / payments / all rights & obligations
- If you don’t pay, bank can go after seller / OG party, unless there was a novation

Question 4

Subject to Mortgage

Answer 4

Original owner remains liable on the note
- DEFAULT
- Don’t owe any of the payments, but bank has the right to foreclose

Question 5

Lien Theory Jurisdiction

Answer 5

Bank has a lien on property, resident has LEGAL title
- JT + Mortgage + Lien theory = JT

Question 6

Title Theory Jurisdiction

Answer 6

Bank has legal title, resident has an equitable interest, when they pay off the Mortgage, they receive title
- Cannot sell property
- Bank holds deed and resident gets deed back when mortgage is paid off
- JT + Mortgage + Title theory = TIC

Question 7

Redemption

Answer 7

Usually when you’re behind on your mortgage & want to prevent foreclosure (aka Redeem) – right to pay off what you owe & reinstate mortgage

Question 8

Equitable Redemption

Answer 8

period of time from Notice of Foreclosure until sale that residents can pay off debt and keep property
- this right can never be waived

Question 9

Statutory Redemption

Answer 9

period of time from sale until whatever statute provides that residents can still keep property
- After sale
- Only be statute
- Depends on jurisdiction