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Flashcards in mortgages/ foreclosure/ water rights/ zoning/ HOA Deck (100)
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1

what is a mortgage

mortgage is the conveyance of a security interest in LAND, intended by parties to be collateral for repayment of the debt

2

2 elements for mortgage

1) a debt and
2) voluntary transfer of a security interest in debtor's land to secure or back-up the debt

3

who is debtor in mortgage situation

mortgagor

4

who is creditor in mortgage situation

mortgagee

5

what is a purchase money mortgage

mortgage given to secure loan that enables the debtor to acquire the NOW-ENCUMBERED LAND

6

what is a non purchase money mortgage

where person already owns land, and gives up land as collateral

7

does a mortgage typically need to be in writing

yes SOF. legal mortgage

8

other names for legal mortgage

1) note
2) mortgage deed
3) security interest in land
4) deed of trust or
5) sale lease back

9

what is equitable mortgage

when O hands creditor a deed to black acre that is absolute on its face

10

is parole evidence admissible to show intent in equitable mortgage

yes

11

whats O's recourse if creditor sells equitable mortgage

sue creditor for fraud and sale proceeds

12

once a mortgage have been created what is debtors rights

title and right to possess

13

once a mortgage has been created what is creditors rights

lien (right to look to land in event debtors default on land)

14

can all parties to a mortgage transfer their interest

YES

15

what are the 2 ways where mortgagee can transfer their interest

1) ENDORSING note and delivery to transferee
(becomes HIDC)
OR
2) exciting separate document of assignment

16

what defenses does a HIDC not have to worry about

personal defenses

17

what are personal defenses for HIDC

lack of consideration, fraud inducement, unconsionability, waiver, estoppel

18

what defenses can a mortgagor hold even against a HIDC

real defenses

19

what are real defenses against HIDC (MAD FIFI4)

1) MATERIAL ALTERATION
2) DURESS
3) FRAUD IN FACTUM
4) INCAPACITY
5) ILLEGALITY
6) INFANCY
7) INSOLVENCY

20

to be a holder in due course what elements must be met

1) note must be NEGOTIABLE, made payable to mortgagee,
2) the ENDORSED must be indorsed, signed against the name mortgagee,
3) he original note must be DELIVERED to the transferee. a photo copy is not good
4) the transferee must take the note in good faith w/o notice of any illegality and
5) the transferee must pay VALUE for the note, meaning something more than nomial

21

does a lien remain on the land so long as the mortgage was properly recorded even if sold

YES

22

what can you record to put others on notice

1) deed or
2) note

23

who is personally liable on the debt if O, debtor mortgagor sells black acre to B and B has ASSUMED the mortgage

both O and B are PERSONALLY LIABLE
1) b is primary liable
2) O remains secondary liable

24

who is personally liable on the debt if O, debtor mortgagor sells black acre to B and B takes SUBJECT TO mortgage

B is NOT personally liable
- only O is personally liable
- But if recorded mortgage stays with land. Thus if O cannot pay mortgage, can be foreclosured

25

how must mortgagee foreclose by

PROPER JUDICIAL ACTION. At foreclosure, land is sold and sale proceeds go to satisfy the debt

26

what if the proceeds from the sale of collateral are less than amount owed

mortgagee can get a defencancy judgment against D for the amount still owed

27

what if there is a surplus of foreclosure

junior liens get paid in order of priority and any surplus goes back to debtor

28

sale of forclosure

sale proceeds are used to pay off mortgages in the order of their priority, each must be paid in FULL before a subordinated lienholder may take.

29

will a foreclosure terminate interests SENIOR to the mortgage being foreclosured

NO

30

will a foreclosure terminate interests JUNIOR to the mortgage being foreclosed

YES but not SENIOR interests