Security Interest in Real Property Flashcards

1
Q

Equitable Mortgage

A

Where real property is treated as security interest for a loan. The land/property must be foreclosed on before selling the property to recover for the default.

Example: A conveys land to B in exchange for $30K loan and A agrees to return the land once the $30K is paid off.

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2
Q

Deed of Trust

A

Deed of Trust A deed of trust is given by the debtor to a third party trustee, who holds the Deed of Trust until the loan is paid off. If it isn’t paid off, the trustee can foreclose or it can resell himself.

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3
Q

Installment Land Sale Contract

A

An arrangement where the debtor signs a contract promising to make payments to the seller/lender – BUT the seller keeps title to the property until the loan is paid in full.

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4
Q

Right of Redemption

A

General Rule: At any time right up until moment of foreclosure sale the Debtor can redeem the property by paying the amount that is due and payable - the amount in arrears plus interest - unless acceleration clause
-Acceleration Clause- Debtor must pay off the entire balance of mortgage to redeem property

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5
Q

Forfeiture Clause

A

If debtor misses a payment, the seller can cancel the K, keep all the monies paid to date, and retake property
- Enforceable

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6
Q

Due on Sale Clause

A

Sys that if mortgagor transfers the property without the mortgagee’s consent, the full amount of the loan becomes immediately due and payable

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7
Q

Lien Theory v. Title Theory

A

Lien- Mortgagee has a security interest in property, not title
Title- Mortgagee has legal title.

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8
Q

Order for Proceeds of Foreclosure Sale

A
  1. Expenses of sale, attorney’s fees, and court cost
  2. Principal and interest of the foreclosed loan
  3. Any other junior interest in order of priority
  4. Mortagor
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