Transferable Interests

Question 1

Can you sell an equity of redemption?

Answer 1

Yes

Question 2

If a mortgagor conveys land without reference to a mortgage, the grantee takes property

Answer 2

Subject to the mortgage

-transferee is not personally liable to mortgagee

Question 3

If transferee subject to the mortgage, upon default mortgagee can
(2)

Answer 3

1. can foreclose upon the property,
   or,
2. can go after deficiency against original mortgagor—still personally liable for the debt

≠enforce deficiency debt against transferee

Question 4

How can the mortgagor get “off the hook” from the mortgagee when they convey property to a third party?

Answer 4

Get a novation, whereby the transferee and mortgagee come to an arrangement and release the mortgagor.

Question 5

If there is a transfer and there is a change in terms of the mortgage, then

Answer 5

original mortgagor will no longer be held liable to the deal

Question 6

What effect does the assumption of a mortgagor?

Answer 6

The transferee becomes personally liable by express assumption of the mortgage obligation

Question 7

If transferee assumes the mortgage, upon default mortgagee can
(3)

Answer 7

1. foreclose against land
2. obtain a deficiency judgment against transferee
3. Go after original mortgagor

Question 8

If transferee assumes the mortgage, defaults, and mortgagor collects against original mortgagor, what is the recourse?

Answer 8

Mortgagor can see indemnity against transferee

Question 9

What is a due-on sale clause?

Answer 9

A type of acceleration clause that declares the entire debt due and payable upon transfer of the mortgagor’s interest

Question 10

A mortgage is satisfied when

Answer 10

the underlying obligation is fulfilled

Question 11

Payment of the debt under a mortgage does what?

2

Answer 11

1. terminates power of sale
2. title reverts to the mortgagor

Any foreclosure sale is void

Question 12

If the mortgagee refuses to accept an unconditional tender of full payment on or before the due date of the obligation:

Answer 12

The mortgage is discharged; however, the obligation remains but is unsecured

Question 13

If the mortgagee refuses to accept an unconditional tender of full payment on or after the due date of the obligation:

Answer 13

Then the mortgagor must pay to clerk of the court and the obligation becomes unsecured

Question 14

Prepayment penalty on a home loan in a principal amount less than $100,000?

Answer 14

The mortgagee cannot charge any prepayment penalty

Question 15

Prepayment penalty on non home loans under 100k?

Answer 15

Can charge a penalty of no > 2% if prepayment occurs during the first three years after the first payment of principal

Question 16

Prepayment penalty if loan > 100k

Answer 16

Can charge any penalty agreed upon between the parties

Question 17

Payment in full entitles mortgagor

Answer 17

To have the mortgage or deed of trust cancelled by the register of deeds

Question 18

A mortgage will be presumed satisfied if

3

Answer 18

Only for creditors and purchasers for value
≠original borrower

1. if 15 years have elapsed from the later of
2. last installment paid; or,
3. from when last obligation was to be performed