Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Mortgages and Liens > Mortgages and Deeds of Trust > Flashcards

Mortgages and Deeds of Trust Flashcards

1
Q

Documents required for Paying full price in cash to purchase property
(2)

A
  1. purchase and sale agreement

2. deed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Documents required for taking title subject to or assuming loans to purchase a property
(3)

A
  1. purchase and sale agreement
  2. deed
  3. consent
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Documents required for obtaining a new loan to purchase a property.
(4)

A
  1. purchase and sale agreement
  2. deed
  3. fresh mortgage
  4. fresh promissory note
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Deed (def.)

A

The formal instrument of conveyance for real property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Note (def.)

A

The evidence of the debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Mortgage (def)

A

Pledge of a security interest in real property; acts as collateral for repayment of a note

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Home Purchase Money Loan (def.)

A

Loan used to purchase a home

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Refinance (def.)

A

Using a new loan to pay off an old loan

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Home Equity Mortgage Loan (def.)

A

A second or junior lien securing a loan on the excess equity in a home

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Mortgagor (def.)

A

The borrower

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Mortgagee (def.)

A

The lender

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Recourse (def.)

A

When lender may look to borrower’s assets other than property to satisfy the debt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Non-recourse (def.)

A

The mortgagee can only recover from the security

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

A mortgage is

A

interest in land securing an obligation to be performed by the mortgagor.

Once the obligation is performed, the interest is void

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

In the United States there are two theories of mortgages

2

A
  1. Lien theory: mortgage is a lien on the property
  2. Title theory: the mortgagor convey’s a determinable fee to the creditor or mortgagee, the satisfaction of the obligation restores title to mortgagor.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Upon the mortgagor’s default, in title theory:

A

The mortgagee is entitled to possession and rents

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What kind of state is N.C. (lien theory or title theory)

A

Title theory; however, mortgagor keeps possession of title until it breaches a condition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Deed of Trust is?

A

The mortgagor conveys the land to a third party trustee to be held for the benefit of the creditor.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Parties in a Deed of Trust?

A

Trustee: holds the property
Beneficiary: Mortgagee/Lender
Trustor: Mortgagor/Borrower

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What power does the trustee have in a deed of trust?

A

power of sale

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is a power of sale?

A

Allows the trustee to sell the land and apply to the death

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

North Carolina lenders prefer a deed of trust because?

A

Without the third party, if the mortgagee bought the property at foreclosure, it would be a voidable transaction

The deed of trust avoids this problem because the trustee exercises the power of sale, leaving the mortgagee free to bid at the sale, as it frequently wishes to do.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

The trustee owes what duty?

A

Duty of fairness

-May not purchase the property from power of sale

24
Q

What is the trustee’s role in a deed of trust?

A

Prepares for an manages the foreclosure and sale of the property

25
Q

How can trustee be removed

A

Written action of mortgagee

26
Q

An absolute deed is?

A

An unconditional conveyance of land without any clause regarding re-conveyance of property

27
Q

N.C. rules on absolute deeds?

A

Absent fraud/mistake

-Parole evidence has no bearing on absolute deeds (cannot interpret as mortgage)

28
Q

Option to repurchase?

A

The grantor may convey land by absolute deed and contemporaneously execute a written agreement with the grantee that the grantee will reconvey upon performance of some condition.

-Intent determines if it is a mortgage or a option to repurchase

29
Q

An installment land contract, or contract for deed, is?

A

An agreement whereby the buyer of land buys the land over installments

-seller does not transfer title until the buyer pays the entire purchase price

30
Q

a defaulting buyer under an installment land contract has few remedies: what happens?

A

In default

  • Subject to immediate dispossession
  • No right of redemption
  • No foreclosure protections
31
Q

Mortgage Requirements

5

A
  1. Writing
  2. Contents
  3. Delivery, Acceptance, Recording
  4. Capacity
  5. Consideration
32
Q

Contents requirement of mortgage

4

A
  1. names of all of the parties
  2. sufficient description of the party
  3. A granting clause
  4. properly signed my mortgagor
33
Q

Adequate consideration for a mortgage?

3

A
  1. Cash
  2. Forbearance of a legal right
  3. Benefits to third parties
34
Q

Capacity needed for mortgage

A

The mortgagor must have the power and capacity to mortgage the land

35
Q

The debt or obligation secured by the mortgage should be specified in the instrument; however, what if it refers to another document?

A

Okay to incorporate by reference

36
Q

The equity of redemption is

A

The right for mortgagor or his successor to redeem the property form the creditor

37
Q

In order for a mortgage to be valid against subsequent bona fide purchasers or creditors

A

it must be recorded in the county or counties where the land lies
-if unrecorded still valid against the mortgagor

38
Q

How long does mortgagor have equity of redemption?

A

Until foreclosure is completed

39
Q

What does equity of redemption require?

5

A 
A mortgage is the lending instrument
\+
Default
\+
Borrower has to pay back the total amount of mortgage debt
 \+ 
any accrued interest and cost 
-
Rents collected by lender
40
Q

When does equity of redemption apply?

A

When the owner is in default

41
Q

Who does the equity of redemption apply?

A

Anyone with an interest in the property that would be prejudiced by a foreclosure sale

42
Q

Can equity of redemption be waived?

A

no, not even in the instrument

“once a mortgage, always a mortgage”

43
Q

Equity of redemption only terminates when?

A
  1. there has been a valid foreclosure sale.

2. Lender has been in possession continuously for 10 years after the right to redeem accrues.

44
Q

Equity of redemption is only a right for borrowers if?

A

The instrument they used is a mortgage

45
Q

What is a purchase money mortgage?

A

a loan made for the purpose of acquiring the property securing the mortgage

46
Q

Types of purchase money mortgage?

2

A
  1. bank –> buyer –> seller of property

2. seller –> buyer

47
Q

What is the priority of a purchase money mortgage?

A

If properly recorded,

Superior to all liens incurred by the buyer of the mortgage, even if filed prior to mortgage

Not against, the seller at the time of the mortgage

48
Q

When foreclosure is on the horizon, what is the priority?

A

Interest acquired before mortgage survive foreclosure, and those after are extinguished

49
Q

What determines the order of priority among interest holders.

A

Prior in time is prior in right

50
Q

What is the doctrine of instantaneous seisin?

A

In order

51
Q

Clauses in mortgages that secure future advances as well as the present debt are permissible if

A
  1. it secures future obligations
  2. defines the maximum principal amount
  3. gives time period
52
Q

After-acquired property is

A

property the borrower acquires subsequent to the execution of a mortgagor

53
Q

An after-acquired property clause is

A

a provision in the mortgage instrument that creates a security interest in the lender on all of the borrower’s subsequent property purchases

54
Q

What is the effectiveness of an after-acquired property clause?

A

It is effective against the borrower; however, it needs to be recorded on each piece of subsequent property purchased in order to be valid against that property’s lien creditors

55
Q

After-acquired property clause only covers?

A

Real Property

56
Q

To make assignment valid, what must be assigned?

A

Mortgage instrument + note

Mortgages and Liens (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions