Mortgages - In General And Types

Question 1

What is a mortgage?

Answer 1

A mortgage is a security device used to secure repayment of a debt.

Question 2

What are the two components of a mortgage?

Answer 2

1. The Note. The note is the borrower’s promise to repay the debt or loan.
2. The Mortgage. The mortgage is the device that provides security to the note by allowing the lender to force a foreclosure sale to recover the outstanding debt if the borrower defaults on the loan.

Question 3

Purchase-Money Mortgage.

Answer 3

A purchase-money mortgage is a mortgage where the borrower takes out a loan for the purpose of purchasing property.

Question 4

Future-Advance Mortgage.

Answer 4

A future-advance mortgage is a line of credit used for home equity, construction, business, and commercial loans (often called a “second mortgage”).

Question 5

IF mortgagee (ie, lender) has security interest in Orchardacres and owner of land abandons, what rights does mortgagee have?

Answer 5

The lender has certain rights prior to an action for default against the owner for non-payment of his mortgage.
The lender was aware that the owner had abandoned Orchardacres.

As the mortgagee, the lender had the right to enter Orchardacres to correct a situation that would have created waste of the property via the loss of income from the abandoned crops.

When she utilized her interest in Orchardacres by entering the property and running it, the lender took possession of the property subject to her interest in it as mortgagee. As such, she was in the position of an owner, not an agent, and will incur liabilities as an owner as well (in the event, for instance, that someone is injured on land and sues the owner during lender’s possession).