Mortgages

Question 1

What makes up a mortgage?

Answer 1

1– a mortgage deed

2 – A promissory note (personal liability for the amount)

Question 2

What is a mortgage deed?

Answer 2

1 –a document that conveys an interest in real property designs to secure performance of the debt

2 – a mortgage must be evidenced by a writing

3 –must include; the identity of the parties; a description of the property; the intent to create a security interest

Question 3

When the mortgage or satisfies the payment what should happen?

Answer 3

The mortgagee executes a release on the mortgage, and the release should be recorded

Question 4

What is a title theory mortgage?

Answer 4

1 –title theory; the mortgagee receives legal title to the mortgaged real property and has a right to take possession of and to collect rents and profits from the property

2 –Until the loan is repaid, the mortgagor retains only an equitable interest in the property

MINORITY

Question 5

What is a lien theory mortgage?

Answer 5

1 –the mortgagee receives a lean, and the mortgagor retains legal and equitable title and possession to the mortgaged real property, unless foreclosure occurs

MAJORITY

Question 6

What is an intermediate theory mortgage?

Answer 6

Lien theory until default, then becomes title theory

Question 7

What remedies does the mortgagee have if the mortgagor or life tenant commits waste?

Answer 7

1 –foreclosure

2 –injunction prohibiting future waste or requiring correction of waste already committed

3 –recovery of damages, limited by the amount of the waste.

Question 8

What happens on a mortgage default?

Answer 8

1 –the mortgagee may obtain a judgment against any person who is personally liable on the obligation

2 – the mortgagee may foreclose the mortgage and obtain a judgment for the deficiency against any person who was personally liable on the obligation

Question 9

What are the four requirements for a judicial foreclosure sale?

Answer 9

1 – be public

2 – be properly noticed

3 –be conducted in a reasonable manner

4 –results in a fare sale price

Question 10

What are the effects of the foreclosure sale?

Answer 10

1- Junior interests in the property are destroyed UNLESS the junior mortgage is not made to defendant

2- senior interests not participating in the foreclosure are not affected by a foreclosure sale

Question 11

What is the equitable right of redemption?

Answer 11

At any time after default but before foreclosure the mortgagor has the right to redeem the property by bringing the mortgage current

Question 12

What is a purchase money mortgage?

Answer 12

1 –hey mortgage given to secure a loan that enables the mortgagee to acquired title to the property

2 –whether it is recorded or unrecorded, it is entitled to a priority over other liens on the property

3 –must be given as part of the same transaction in which title is required

Question 13

What are the effects of modification?

Answer 13

1 –if a senior mortgage is modified, a junior mortgage prevails over the modification if the modification materially prejudices the junior mortgage

2 –examples: increasing the amount of principal; Increasing the interest rate

Question 14

What happens when a mortgage is transferred subject to the mortgage?

Answer 14

1 –in the event of default the mortgagee may foreclose and force the property to be sold

2 –the transferee of the property does not have personal liability for the debt

Question 15

What is a novation?

Answer 15

The transferee of real property and the mortgagee agree that the transferee will assume the mortgage and the mortgage or will be released from liability

Question 16

What are two examples of mortgage alternatives?

Answer 16

1 –deed of trust (generally treated like mortgages)

2 –installment land– sale contract