Mortgages Flashcards
What is an equitable mortgage?
An equitable mortgage is established when a debtor gives an absolute deed to a lender with the intent to secure repayment of a loan.
What is an absolute deed?
A deed that is free of encumbrances and transfers unrestricted title to property.
What is a deed in lieu of foreclosure?
A deed conveying a mortgagor’s interest in the mortgaged property to a mortgagee in lieu of foreclosure allows the mortgagee to take immediate possession of the property without the formalities of a foreclosure sale.
What are the ways to avoid foreclosure?
Equitable redemption, deed in lieu of foreclosure, and renegotiating debt
What is equitable redemption?
Mortgagor pays full amount of outstanding debt (as increased by acceleration clause) plus any accrued interest
What is renegotiating debt?
Parties renegotiate terms of promissory note and mortgage.
What is the statutory right of redemption?
It permits a mortgagor to reclaim the property after a foreclosure sale.
What is a mortgage deed?
A writing that conveys an interest in collateral to secure debt.
What is a promissory note?
A formal IOU in which the borrower promises to repay the debt according to the listed terms.
What is a mortgagee?
A person with security interest in the property (the bank)
What is a mortgagor?
A person whose property secures the obligation (the debtor)
What is the effect of transfer of mortgages with or without a promissory note?
Both documents are transferred unless expressly prohibited in note/mortgage, forbidden by statute or public policy, or increases mortgagor’s duties, burdens and risks.
