Mortgages Flashcards
A mortgage is
the conveyance of a security interest in land, intended by the parties to be collateral for the repayment of a debt.
A legal mortgage may also be called:
mortgage deed; a note; a security interest in land, a sale lease back, a deed in trust.
Once mortgage is created, what are parties rights and interests?
Unless/Until foreclosure, debtor/mortgagor has Title and the Right to Possess.
Creditor/Mortgagee has a Lien.
A mortgage automatically follows a
properly transferred note.
Creditor/Mortgagee can transfer their interest by
1) Endorsing the note and delivering it to transferee OR
2) Executing a separate document of assignment.
A holder of a mortgage “in due course” means
the transferee is free from any defenses that could have been raised against the original mortgage.
If a buyer of mortgaged land “assumes the mortgage,”
Seller and Buyer are both personally liable, but Buyer is primarily liable.
If a buyer of mortgaged land buys “subject to the mortgage,”
the buyer assumes no personal liability.
A mortgagee must foreclose by
proper judicial action.
If proceeds of foreclosure are less than the amount owed, the mortgagee may
bring a deficiency action against the debtor.
A foreclosure will terminate interests
junior to the mortgage being foreclosed but will not affect senior interests.
Foreclosure does not affect any interest
senior to the mortgage being foreclosed. Thus, the buyer at the sale takes the land subject to such interest.
How is the right of equitable redemption exercised?
By paying off missed payments, plus interest, plus cost.
May a debtor/mortgagor waive the right to redeem in the mortgage itself?
NO!
