Real Property Flashcards
Define
A Purchase Money Mortgage
Money used to purchase the property
A purchase money mortgage always gets priority, meaning it always gets paid back first.
Define
Equitable Redemption
Period of time from the notice of foreclosure to the foreclosure sale that the mortgagor has the right to pay off the debt
Equitable redemption can never be waived.
What is Statutory Redemption?
Period of time after the foreclosure sale
Statutory redemption does not automatically happen.
What is Lien Theory?
When bank/mortgagee gives the money, they only have a lien on the property
The buyer has legal title and can sell the property.
What is Title Theory?
Bank has title to the property - bank holds the deed
Buyer gets legal title when they pay off the title and cannot sell the house.
What happens in a lien theory jurisdiction when joint tenants mortgage their property?
Joint tenancy is not severed.
What happens in a title theory jurisdiction when joint tenants mortgage their property?
Joint tenancy is severed.
What occurs when a new buyer assumes a mortgage?
The new buyer becomes primarily liable to the mortgage
The original buyer is now secondarily liable unless a novation occurred.
What does it mean to take subject to the mortgage?
The new buyer is not liable for the mortgage and the original buyer still has to pay the balance of the mortgage.
The bank can foreclose on property is original buyer does not pay mortgage
Define
Deed in Lieu of Foreclosure
Signs the deed to the bank and skips the foreclosure proceedings.
What happens at a foreclosure sale with multiple loans on the property?
- Junior mortgages are wiped out as long as there was notice given to the other mortgagees and they joined suit.
- Loans taken out before the foreclosed mortgage stay and the buyer will be taking subject to those loans
What happens during a deficiency judgment?
The mortgagee can go after the original buyer for the amount of the balance that was not recouped at the foreclosure sale.
What is an Installment Land Contract?
Paying the balance of the property sale in installments. The buyer only gets title when they pay off the whole balance.
Marketable title is not due until all of the payments are made
To satisfy the Statute of Frauds, real estate contracts must ____
be in writing.
What are the requirements to get out of SOF defense through partial performance?
Two of the three has to have occurred:
* Buyer made a payment,
* They made improvements to the land; or
* They took possession of the land.
What are the essential terms of a real estate contract?
- Price,
- parties,
- basic description of the property,
- condition of the property,
- contract is signed by the party to be charged.
What is Equitable Conversion?
Since the seller is only signing equitable title to the buyer, the risk of loss shifts to the buyer on the day of the signing of the contract.
What is Marketable Title?
An implied promise that the land is free of any encumbrances, liens, or zoning violations.
When is time considered of the essence in a contract?
Generally, time is not of the essence unless stated by parties.
Define
Merger in real estate contracts?
On the day of closing, the contents/conditions of the contract merge into the deed and the deed controls here on out.
The buyer can’t sue on the contract, only the deed.
What is the Duty to Disclose?
Seller has a duty to disclose material defects that cannot be seen by the buyer.
What is the difference between visible defects and not visible defects?
The facts will tell us if the defects are visible to the buyer or not.
