Property: Mortgages

Question 1

Mortgage

Answer 1

A conveyance of an interest in real property made to secure performance of an obligation. Typically evidenced by a mortgage deed and a promissory note.

Question 2

The mortgage deed must include:

Answer 2

(1) the ID of the parties
(2) the description of the property; and
(3) the intent to create a security interest

Question 3

Title Theory

Answer 3

the mortgagee receives legal title to the mortgaged property AND has a right to take possession and to collect profits from the property.

Question 4

Lien Theory

Answer 4

The mortgage receives a lien over the property, but has no right to profits, and does not take possession until default/foreclosure

Question 5

Foreclosure

Answer 5

when there is default on the obligation secured by the mortgage, the mortgagee may obtain a judgment and foreclose

Question 6

Junior interest

Answer 6

Junior interests (second/later mortgages) in the property are destroyed by a foreclosure sale, unless the junior mortgagee is not a defendant and does not receive notice of the sale.

Question 7

Redemption

Answer 7

the mortgagor’s interest in the property is called the equity of redemption. At any time after default but before foreclosure, the mortgagor has the right to redeem the property by paying the debt due.

Question 8

PMM

Answer 8

Purchase money mortgages are given to the vendor of the real estate. PMMs have priority over liens, even if lien was recorded first.