Mortgages

Question 1

Model

Answer 1

C, a creditor, is thinking of lending O $50K. O offers Blackacre as collateral.

Question 2

Mortgage

Answer 2

Is the conveyance of a security interest in LAND, intended by the parties to be COLLATERAL FOR REPAYMENT OF A DEBT.

2 Elements: (1) Debt (2) Voluntary Lien in Debtor’s Land to Secure a Debt

Question 3

Creditor-Mortgagee can transfer his interest by:

Answer 3

Endorsing the Note & Delivering it to the Transferee OR

By Executing a Separate Doc. of Assignment

*IF the note is endorsed & delivered, the transferee is eligible to become: A holder in due course. This means that he takes the note free of any personal defenses that could’ve been raised against the original mortgagee

Question 4

MADFIFI4

Answer 4

The Real Defenses

Material Alteration Duress Fraud in the Factum Incapacity Illegality Infancy Insolvency

Question 5

Does Buyer Hold Subject to 1st Bank’s Mortgage?

Answer 5

Yes. ALL RECORDING STATUTES APPLY TO MORTGAGES AS WELL AS DEEDS.

Question 6

Foreclosure

Answer 6

Mortgagee MUST foreclose by: proper judicial action.

At foreclosure, the land is sold. The sale proceeds go to satisfying the debt.

Foreclosure does NOT affect any interest SENIOR to the mortgage being foreclosed.

May a debtor/mortgagor waive the right to redeem in the mortgage itself? = NO