Recording System

Question 1

what are the three types of recording statutes:

Answer 1

(1) race; (2) notice; (3) race notice

Question 2

What is the rule in race jurisdictions?

Answer 2

The first grantee to record wins; notice is irrelevant

Question 3

What is the rule in a notice jurisdiction?

Answer 3

a subsequent BFP without notice prevails

Question 4

What is the rule in a race-notice jurisdiction?

Answer 4

first BFP to record prevails

Question 5

Who is a BFP?

Answer 5

(1) purchaser; (2) pays value; and (3) takes without actual, inquiry, or record notice of prior conveyances

Question 6

When does a purchaser have inquiry notice?

Answer 6

inquiry notice is satisfied if upon reasonable inspection the purchaser could have learned that someone else was in possession of the land

Question 7

When is there record notice?

Answer 7

deed is recording within the chain of title

Question 8

What is estoppel by deed?

Answer 8

a person who conveys property that they have no interest in; is estopped from denying validity of that conveyance; if he subsequent acquires title that he previously purported to transfer

Question 9

Are judgment creditors protected by recording statutes?

Answer 9

Generally no, unless the state statute grants them protection

Question 10

Can a mortgagee transfer their interest?

Answer 10

Yes by (1) endorsing note and delivering it to transferee; or (2) executing a separate assignment doc
-a mortgage automatically follows a properly transferred note

Question 11

If the mortgagor transfers property, and buyer assumes the mortgage:

Answer 11

buyer becomes primarily liable and mortgagor remains secondarily liable; mortgagee can sue both

Question 12

If the mortgagor transfers property and buyer DOES NOT assume the mortgage:

Answer 12

• buyer is not personally liable

- mortgagee can still foreclose on the property if mortgage was properly recorded

Question 13

When a buyer assumes a mortgage and makes a modification to the mortgage:

Answer 13

mortgagor’s liability to the mortgagee is discharged

Question 14

Foreclosure sale:

Answer 14

• judicial process where on default mortgagee sells the land to satisfy the debt
• if there is a surplus in sale proceeds then junior lien holders are paid off in order of priority
• if there is a deficiency then mortgagor can bring a deficiency action against the mortgagor for the remaining debt

Question 15

What is the affect of a foreclosure sale on junior lien holders?

Answer 15

Foreclosure terminates junior lien holder interests UNLESS the foreclosing party fails to include the junior lien holder as a party to the foreclosure action