Pg 61 Flashcards
What is judicial foreclosure?
On default, the lender can require immediate payment in full of the loan, and then can start an action to foreclose by asking for a court decree that directs the property be sold.
The court directs an officer to sell the property at public auction, then the money is used to pay the cost of the sale, the amount owed on the mortgage, and the extra goes back to the mortgagor. If less is recovered, the mortgagee gets paid what there is and the rest is a deficiency judgement
What is a deficiency judgment?
A monetary judgement from the court for the mortgagor to personally pay the difference between the foreclosure sale amount and what is owed
What is a restriction that is often placed on deficiency judgments?
The mortgagee only gets the excess of the debt over the fair value of the property instead of the price paid at the foreclosure sale
What is a non-judicial foreclosure?
Foreclosure proceeding that happens without bringing a legal action. Often a mortgage or a deed of trust gives the mortgagee or the trustee power to do this without a court being involved. This is less expensive and more often used. In California it is used 95% of the time
What is redemption?
This is how a debtor can respond to a foreclosure action
What are the two different types of redemption that are available to a debtor in response to a foreclosure action?
– Equitable redemption
– statutory redemption
What is equitable redemption?
This exists for the interest of equity and applies up until the foreclosure sale happens. The debtor can stop the foreclosure sale by either paying off the debt, or bringing the loan current (which means he pays the missed payment and penalties). If the original agreement had an acceleration clause, then the only way to redeem is to pay off the total debt.
Once a foreclosure sale occurs, is it possible to still get redemption?
No, once the foreclosures sale occurs, the debtor’s remedy of redemption is gone
Is it possible in the original contract for a mortgage to waive redemption rights
No
What is statutory redemption?
This exists through statute in jurisdictions that allow for it. It says that a debtor can redeem his property after a foreclosure sale if the debtor , within a limited timeframe, which is usually 6 to 18 months, offers the new buyer the same amount of money he paid for the property plus interest and other expenses, and if this happens then the new buyer must sell to the debtor.
What is the best tip to get more points on an essay?
Always argue both sides. “But Gloria would argue there was no delivery.” Argue what the plaintiff thinks and what the defendant thinks
