Property (from Grossman + outline) Flashcards
(168 cards)
1
Q
For the sale of land, there are 2 transactions: (1) the real estate kx and (2) the___
A
deed
2
Q
the real estate kx is made to confirm the ____ that the parties will sell the land and the terms
This real estate kx must be in _____ due to the ____
A
intent
writing
SOF
3
Q
EXCEPTION for the sale of land where you DO NOT need a writing. This is the concept of part performance.
Part performance is found when the buyer gives SOME (like down payment) of the purchase price, made IMPROVEMENTS on land or take ____ of property
A
possession
4
Q
a real estate kx must have (1) price, (2) parties, (3) basic description of the terms, and (4) signed by the party ___
A
to be charged
5
Q
under the doctrine of equitable conversion, this takes place when you SIGN the real estate kx. The ROL transfers to the ___ when the parties sign the real estate kx. The buyer now has equitable title
A
BUYER
6
Q
The buyer bears the ROL once he signs the real estate kx due to the rule of____
Buyer also has ___ interest in the property
A
equitable conversion
equitble
7
Q
in the real estate kx, there is an implied promise to convey _______ title which means it is free of any ____
A
marketable
encumbrances
8
Q
Examples of encumbrances that would make title unmarketable include easements, liens, zoning _____, morgages,
A
VIOLATIONS (not simply the presence of an ordinance)
9
Q
in a real estate kx, time is generally _______unless time is STATED in kx
A
NOT of the essence
10
Q
on the day of closing, the real estate kx MERGERS into the deed. Therefore, you can only sue on the ___
A
deed
11
Q
Once you sign the deed, the terms of the real estate kx do not exist on its own anymore
A
k
12
Q
in a land sale kx, ____ is an equitable remedy the court can order to make a person finish the kx.
___is granted when an item of the kx is UNIQUE. And land is always considered unique
A
specific performance
13
Q
the seller MUST disclose physical defects to the buyer that seller KNOWS about, generally ones that cannot be seen by buyer. Look for stuff like safety. BUT if defects are ____ to buyer then don’t have to disclose
A
known
14
Q
equitable conversion deals with _____
A
ROL
15
Q
what makes a title unmarketable?
DEVA
A
Defect in chain of title
Encumbrances (mortgage or easement not mentioned in the kx)
Violation of a zoning ordinance
Title acquired by adverse possession
16
Q
Does a violation of a housing or building code render title unmarketable?
A
NO
17
Q
An executed deed means that the deed ___ the parties, has words of ____, is signed by the seller, and describes hte land
A
identifies
grant
18
Q
A quitclaim deed gives ______
A
no warranties
19
Q
a warranty deed gives 6 covenants:
PRESENT
pReSNt covenatns of Right to convey, _____, No encumrances,
A
seisen
20
Q
a warranty deed gives future covenatns FEW
Further assurances
quiet Enjoyment
___
A
warranty
21
Q
if the mortgagor gives away her interest “subject to” the mortgage, the _____ mortgagor is liable on the mortgage
A
original
22
Q
if the new transferee “____” the interest, both the _____ and the ___ are liable
A
assumes
ORIGINAL mortgagor
NEW TRANSFEREE
remember hte new party ASSUMES liability as well
23
Q
if there is a NOVATION, then only the ____ is liable
A
new transferee
24
Q
a due on sale clause (which state that if the mortgagor transfers the interest in land without the mortgagee’s consent, the full balance under the loan is due IMMEDIATELY) are ____
A
enforceable
25
in a majority of states, they follow the _____ where the mortgage only has a lien on the land
LIEN THEORY
26
some states follow the ______ where ____ is transferred tot eh bank right away upon loaning the money
title theory
27
A bank can begin foreclosure proceedings upon ___
default
28
under the equity of redemption, this allowd a debtor to ____ the property by paying ______ due under the mortgage agreement prior to foreclosure
This right cannot be waived in the mortgage or deed of trust but may be waived later for ___
redeem
EVERYTHING
consideration
29
the PURCHASE MONEY MORTGAGE is the most important mortgage
this is THE LOAN you used to actually purchase the property. Paid back FIRST
30
an acceleration clause states that the entiere balance is due if a payment is missed
this is _____
enforceable
31
Redemption after foreclosure - this is a stautory right. THis allows the debtor to get the property _______ after the foreclosure sale by paying the _______ within a period of time
BACK
full purchase price
32
The equitable right of redemption can ______ be waived
NEVER
33
elements of adverse possession:
Cookies
Often
Are
Hidden
1. continuous
2. Open visible and notirious
3. Actual (and exclusive) possession
4. Hostile
34
continuous means _____ for the amount of time the statute says
uninterrupted
note that just because the use is seasonal, this doesn't mean it can't be continuous
35
seasonal = fine
off one year = clock starts ___
over
36
two ways to prove the elements of open, visible, and notorious for adverse possession:
(1) showing that the actual owner KNREW you were there and did not agree to it, or
(2) your conduct is outlandishly obvious, and the owner _____
should have known
37
ALERT: If you tell other people the true owner actualyl owned the land, you _____ claim this as adverely possessed
CANNOT
38
for actual and exclusive possession, for the clock to start ticking, you need to ACTUALLY PHYSICALLY trespass, and the owner cannot be possessing the property _____
WITH you
39
hostile means you don't have the true owner's permission to be there
yeah duh
40
Constructive adverse possession is simple. It is just when a psychopath enters a small portoin of land in good faith and with a _____ deed which says they owned the ____ parcel
fucked up
whole
41
Elements of constructive adverse possession:
(1) you enter the land under color of title (with a deed that appears to give title btu doesn't because it's _____
(2) you enter in good faith thinking your fake title actually gives you full deed to this land
(3) you enter _________ (even if ______)
(4) the owner is not there
BOOM
(1) defective
(3) a portion of the land (even if it's a small part)
42
Adverse possession is all about controlling the WHOLE part of the land, whereas constructive AP, you only need to control PART Of the land so long as you _____ you owned the WHOLE thing... you get the whole thing
BELIEVED
43
once the adverse possession period ends, the adverse possesor has superior title over the true owner. But they still have to bring a "quiet title" action to establish they are the true owner.
if you don't "quiet title" the property will NOT be _____ and will be under ____
marketable
threat of litigatoin
44
for taking in adverse possession, the two parties must be in privity. this usually can be achieved by:
blood
contract
deed, OR
___
will
45
For Adverse possession, the clock does NOT start running against an owner who is insane, in prison, or under 18 when the adverse possessor ____
starts their posssession
46
if two or more crackheads adversely possess the land TOGETHER, the acquire the title as ___
tenants in common
47
adverse possession can ONLY take the rights the owner themselves had
if you adversely possess a life estate , you get a life estate measured by the____
previous owner's life
48
three things for a transfer of deed to be effective
Incredibly
Delicious
Apples
INTENT
DELIVERY
acceptance
49
deed must have PRESENT INTENT aka the power of ___
now
50
do you HAVE TO record a deed for it to be a valid delivery?
not necessarily
just ask - WAS THIS A PRESENT INTENT DELIVERY
51
will a deed with an oral condition that isn't in the deed itself be valid?
YES just without the offending condition. GOOD DELIVERY
52
can you give property to a person who is dead?
NO. This is VOID and title remains with grantor
53
can you give title to a corporation that is not get legally formed?
NO
PSA: IF YOU DO NOT EXIST, WE ARE NOT GIVING YOU LAND.
54
Can the grantee give back a deed that was successfully delivered?
no
55
estoppel by deed (sometimes referred to as ____) ensures that if a grantor purports to convey title that he does not actually hold, and he subsequently acquires title to the property, it will automatially make the prior benefit conveyed to the grantee ____
after acquired title
valid
56
is a subsequent BFP required to search title?
no....
check
57
to be a subsequent BFP, a buyer must NOT have had ____, actual or constructive, of the original grantee
notice
58
if the original grantee properly recorded, the subsequent buyer would have been on notice and therefore cannot be a valid subsequent __
BFP
59
When the son purported to convey the vacant land to his friend by warranty deed with no exceptions, he did not yet have title. HOWEVER, the friend was a BFP who paid value for the warranty deed, and properly recorded it ___ of the mother's interest
Therefore, applying the doctrine of _____, when the mother died and the son's interest vested, his prior conveuance to the friend (who had no notice and paid value) will automatially become effective nad the friend will prevail
without notice
estoppel by deed
60
Courts are split as to whether an ___ to purchase during a lease period may be assigned separately from the tenatn's interest int he leasehold itself
option
61
The most common type of leasehold is the estate for ____, which is an estate that lasts for a fixed period of time. The lease does not have to be a certain amount of time
years
62
an option to purchase property may be included within a tenant's lease as long as the option is excercised ______
during the term of hte lease
63
RAP does NOT apply to an ___ to purchase land when it is contained within a lease of that property and may only be exercised during the term of the lease
option
64
the key issue is whether a leasehold estate can assign its _____ to purchase while keeping the remaining terms of the lease
option
65
a real covenant is just a ____ promise to DO or NOT to do something
written
66
covenants can be affirmative (to do something) or _____ (to refrain from doing something)
negative
67
there are 5 basic requirements to see whether a covenants will RUN with the land and bind _____
future landowners
68
to RUN with land we need covenant:
TIP'N
Touch and cocern
intent
pricity
notice
69
intent means that the original parties must have intended for the bruden to run during the ____ conveuance
original
70
touch and concern means that the covenant has to bind people in their capacity as LANDOWNERS NOT ___
individuals
this has to do with the LAND ITSELF
71
notice means that the burdened party KNOWS about the covenant that restrict it when ____
they purchased it
72
notice can be established by (1), (2), or record notice for the burden to run
actual
inquiry
73
And we analyze whether the burden runs by simply applying:
WITH-N
writing
intent
touch and concern
privity
74
There is an order of payment that must be followed anytime there is surplus money available after the foreclosure sale.
Elephants (Expenses first: the sale, attorneys fees & court costs)
Munch (the foreclosed mortgage principal & interest is paid next)
Large (Then junior lienholders like weird credit card companies that have attached judgments on your house and second mortgages - first one to record gets paid first)
Melons (then finally... the mortgagor gets it. This almost never happens on the MBE and likely won't on J24. Look at all these people who have to get paid before the mortgagor)
75
So this example makes it easy to see that a foreclosure _____ and destroys all interests junior to the main mortgage being foreclosed (in this case, Bank A was the mortgage being foreclosed)
extinguishes
76
Goat-Note & Possible Trick on J24: Junior mortgages and liens are _______... so if they are not told about the foreclosure sale... their interest does not get wiped out. Their little junior mortgage still remains on the land. So in the last scenario... if nobody told Bank C (the $10,000 credit card lien) about the foreclosure of Bank A... they'd still have their little $10,000 lien on the property even after the foreclosure was done! The new owner would have to deal with it.
necessary parties
77
78
When you loan a buyer money to buy a house (you don't even have to be an 'official lender' by the way, it can be a loan between two family members)... that purchase-money loan gets super-priority over all other non-purchase money mortgages and claims, EVEN if the non-purchase money mortgage or liens were recorded first.
79
80
But remember my Goats... only ____ purchase-money mortgages truly run shit.
recorded
81
Goat doesn't have the full amount, so he puts down $50,000 and takes out a mortgage for $250,000 to buy the home cough, cough... purchase-money mortgage
However, suppose Goat had some credit card debt that had been following him around. American Express has a lien on "any of Goats future acquired assets"
So the moment he buys the house... the American Express bill attaches to the home as well and the lien is recorded instantly.
Then the purchase money mortgage for $250,000 is recorded second.
Then a year later, Goat takes out home improvement loans to make his tiny home even cooler.
Who has priority in the event of foreclosure?
Obviously the fucking recorded PMM. It wins over all prior (existing before it was recorded) and subsequent (arising after it was recorded) claims.
82
An unrecorded purchase-money mortgage still wins against ____and liens... but loses against subsequently recorded mortgages and liens that come after it.
prior recorrded mortgages
83
Anyway, so the Recorded Purchase Money Mortgage wins against everyone, the unrecorded PMM has priority over earlier recorded claims but loses against all subsequently ___ recorded mortgages (whether PMM or not)
after acquired
84
Goat-Note for 330+ scorers (everyone else can ignore): If the seller of the house lends you money to buy THEIR house... this is called a ____ or vendor's PMM... if you take out a loan from the seller AND the bank to get two Frankenstein PMM loans... the seller's purchase money mortgage has priority over the bank's purchase money mortgage. Just a little trivia for you to remember.
seller PPM
85
So the rule is this: if the principal is changed or the interest rate is raised without the junior lienholders consent, the junior lienholder has priority over the raised amount. So the payment structure in foreclosure would be like this
Foreclosure -> $20,000 paid to Bank A --> $10,000 to Bank B --> $80,000 to Bank A.
86
______is a principal which allows a mortgagee to acquire the rights and priority of an earlier lien or motgage if the new mortgage's funds are used to pay off the prior mortgage
equitable subordiation
87
Anyway, the t____ says that a senior creditor, having two or more options to satisfy their debt, has to FIRST dispose of the option not available to the junior creditor (THE DAMN VACATION HOME)
two funds rule
88
when it comes to ___ covenants, you can only sue the person who ACTUALLY SOLD YOU THE LAND
present
aka they do NOT run with the land, so ppl later on cannot sue on a present covenant that was broken when YOU bought the damn land
89
a FUTURE covenant can be breached at the time of delivery AND ___
anytime after as well
90
Do future covenants run witht he land?
YES which means that a present owner can sue the person BEFORE the grantor who gave the land to them if the ealier person is the one that CAUSED the covenant to be broken
91
present covenatns:
SAC
Future covenants:
FAQ W
P: seisin, against encumbrances, and right to convey
F: Further Assurances, Quiet enjoyment, Warranty
92
COVENANTS
93
The covenants of quiet enjoyment and covenants of warranty are NOT breached by a WRONGFUL claim or eviction by a third party.
HE'S A FOWL
IN THE WRONG
THAT IS HOW YOU WILL REMEMBER THIS
A WRONGFOWL DEED WILL NOT FORCE THE GRANTOR TO DEFEND
YOU GOTTA PAY FOR THAT YOURSELF
94
The grantor only needs to defend against an ACTUALLY ____ title... not a wrongful attack on your deed by someone who DOESN'T have better title than you
superior
95
a special warranty deed guarantees 2 things, and these are ONLY promises on behalf of THEMSELVES (not anyone before them, unlike general warranty deed)
1. Grantor promises that they have the right to _____AND
2. the property is free from encubrances when the grantor had the land or that were created by the ____
convey
grantor (the grantor will NOT defend title if the encumbrances or claim is about some shit the OLD owner did before them)
96
The special warranty deed basically says "I own this property, I can give it to you, and when I was living there I didn't do any weird shit to it like put an easement, mortgage or lien on it."
97
Can you... gift someone a deed while you're alive?
yes so long as you have
1. intent
2. delivery
3. acceptance
98
a deed can be VOID if it is (1) forged, (2) not delivered, or deeds ____itself
docuent itself
99
LAPSE is when someone getting a gift in a will DIES before _____
the testator
100
anti-lapse statutes
cool
101
ademption is when a specific ____ of real property (or personal property) simply isn't in the estate when you die
bequest
102
the will ____ at the time of death
speaks
103
under a notice statute, the second purchaser wins if they have _______
no notice
So for Kevin to win:
Rainbow would have to not record; AND
Kevin couldn't have notice that Rainbow bought it before him (doesn't MATTER if he records or not!!!!!)
104
how does kevin win in a race-notice jdx?
e can only be bona-fide in a race-notice if:
Rainbow doesn't record; AND
Kevin takes without notice; AND
KEVIN HAS TO NOW FUCKING RECORD BEFORE RAINBOW
105
RACE-NOTICE -> YOU GOTTA ___
NOTICE -> YOU GOTTA BE AN INNOCENT BUNNY RABBIT WITH NO NOTICE, BUT YOU DON'T HAVE TO RECORD
record
106
notice statute need 2 things:
1. first buyer does NOT record
2. second buyer has ____-
no notice
107
race notice statute need 3 things:
1. first buyer does not record
2. second buyer has NO NOTICE
3. .second buyer _______
records b4 first buyer
108
IF IT SAYS THE DAMN WORD "FIRST" -> IT'S _____ NOTICE.
race notice
109
who is NOT a BFP
Can't be a donee and get it as a gift
Can't be an heir
Can't get it from a will
Can't be a judgment creditor
110
notice (AIR)
actual
inquiry
constructive
111
the ____ rule is when an heir, donee, or devisee gets the land from a bone fide purchaser and becomes bone fide themselves
shelter
112
But the trick on F24 will likely be about this small yet highly profound fact: owner's title insurance policies cover BOTH the named owner AND their ____ and ____ so long as the named owner or their heirs OWNS THE DAMN PROPERTY
heirs
devisees
113
An owner's policy of title insurance continues to protect the owner of the property if they are EVER sued by a buyer way down the chain, even one hundred fucking years later. It protects you ___.
forever
114
a merger of an easement only occurs when the owner acquires BOTH the dominant and servient estate.
here, no merger occured because of the son's interest in whiteacre. The son was the owner of blackacre but he was only a ______ in Whiteacre
life tenant
115
an easement appurtenant transfer s ______when the dominant estate is tranfered
automatically
116
an easement by ____ is created when the owner of a tract of land sells a part of the tract of land and by his subdividion deprives one lot of acccess to a public road or utility line
necessity
117
The right of ___ simply means that the mortgagor has the right to pay off the full mortgage at any time during the mortgage and own the property free and clear.
redemption
118
When are mortgages effective against third parties?
when they are filed in the public records
119
The date of filing determines their priority rank. How easy is that!
120
But a person ___ put a mortgage on their property to secure the debt of another. If my parents had done this... and then Ollie wouldn't have paid back the bank on his nail salon loan... the bank would have foreclosed on my parents house... wtf.
CAN
121
A mortgage to secure the debt of another is ___
valid
122
What they gave Goat was a purchase money mortgage. This is just an industry term meaning that funds were used directly to buy a home.__
funds were used directly to buy a home.
123
The most common trick the bar exam tests on when it comes to purchase-money mortgages is that they have priority over fucking everything (any claim or lien or non-purchase money mortgages), even ones that were recorded___
first
124
I repeat, this is a GUARANTEED two points on J24 if you can remember this simple rule: r___mortgages have priority over non-purchase money mortgage claims, even ONES that were recorded BEFORE THE PURCHASE MONEY MORTGAGE
recorded purchase money
125
who wins?
the PMM is paid first
126
Future advanced mortgages are simply mortgages where the lender distributes the money at different _____. So the money is not all distributed at once.
TIMES
127
The most important thing our little squirrel brains need to know about future advance mortgages to answer these MBE questions is whether or not the payments are mandatory or __
optional
128
Imagine a construction company is building a hotel. The mortgagor gives the construction company $10 million up front and then another guaranteed $5 million when they are 50% done.
This is a mandatory payment with a mandatory triggering condition (the property being 50% done)
When the payments are mandatory like this... all the new payments have the same priority as the original mortgage.
129
So let's say a creditor comes along and puts a lien on the construction company before they get the $5 million second mandatory advance. You can picture that creditor as a little lien stream coming in between the original $10 million payment and the next $5 million payment.
So who gets paid first in the event of foreclosure?
in a MANDATORY future advance scenarui
The law is basically like "look you dumbass lien holders, you KNEW damn well this construction company was going to get another $5 million mandatory payment... so why'd you put your stupidass lien on this thing and expect it to be paid second? You are paid LAST after all the mandatory payments."
#fuckthemliens
130
in an OPTIONAL future advance scenario
If the payments are optional on the other hand... like if the bank said "we might pay you $5 million if we like how the construction looks halfway through" ... then the junior lien has priority over the later payments.
131
installment kx
When does the seller have to convey marketable title?
Not until the LAST payment
132
What if the buyer fails to make an installment payment?
CL:
Modern view:
Common Law: Buyer would lose all past payments and have to fuck off.
Nowadays, unless there is a forfeiture clause which states time is of the essence, this doesn't happen.
Modern View: In most states the seller is only allowed to keep the reasonable value of the rental value at the time the buyer lived there.
133
What is an absolute deed as security (i.e. an equitable mortgage?)
Goat has poor credit... so he can't take out a mortgage on the land. He desperately needs money to keep it going.
So Goat asks to borrow money from Rainbow Brown in exchange for a security interest in the dodgeball gym Goat owns.
Rainbow agrees... but instead of executing a note or a mortgage deed... Rainbow simply asked for the deed itself with a writing which said "after the loan is paid back, Goat can get the deed back for the dodgeball gym."
he moment Goat does not pay, he can simply avoid foreclosure altogether and take the property back, stripping Goat of any rights he would have under a normal mortgage.
Goat is "selling him the deed" and leasing it... but in reality Goat is a disguised borrower. If Goat defaults on his "rent" payments, which are really loan payments, then Rainbow, who holds legal title, can instantly terminate the tenancy and option rights without having to go through foreclosure and keep the property.
This is a disguised mortgage and it is used to fuck people over who are desperate or unaware of the law.
134
what i need to know about absolutes deeds disguised as mortgages
Courts are hostile to these arrangements and will usually treat these bullshit loans as mortgages if it seems that they were designed to prevent the borrower's right to redeem. The court will look at extrinsic evidence to figure out what the parties actually were trying to do.
Moral of the story: Once a mortgage, always a mortgage.
135
A _____s when the title is given to a third party (a trustee) to hold as security for a loan between a borrower and a lender.
3 parties
deed of trust
Basically, if the borrower fucks up and defaults on the loan... the Trustee can sell the property and apply the proceeds to the debt.
136
There are two competing theories regarding classification of mortgages: the title theory and the lien theory.
137
In a ____ theory state (minority of states), a mortgage granted by one joint tenant severs the joint tenancy and turns it into a ____
title
tenancy in common
138
In a ___-theory state (the majority of states are lien theory states), if one joint tenant takes out a mortgage it is only considered a ___ and will ____ the joint tenancy.
lien
lien
NOT SEVER
Memory Trick: Remember a tiny little piece of paper leaning against a house will not break it apart.
139
So if a joint tenant takes out a mortgage in a ____ theory state it will not break up the UNITIES (remember how joint tenancies need those stupid unities of time, title, interest & possession?)
Therefore the joint tenancy will ____.
lien
survive!!!!
140
edemption in equity... or as I call it "the last opportunity", is a chance for borrowers to save their property from foreclosure.
Almost all states allow it and it simply means that at any time prior to the foreclosure sale, a debtor has the right _____
How exactly do you save your property before a foreclosure?
By paying the missed payments + interest + costs
to redeem the land and save the property.
141
Some mortgages contain an acceleration clause, and the bar exam wants you to know these are ____ and ____
valid
allowed
142
High Level Goat Trick for 300+ Scorers: Acceleration clauses are typically triggered by nonpayment of the mortgage... but they can also be triggered by things like failing to pay _____ on the house. Your mortgage payments can be accelerated by failure to pay insurance if this is what the acceleration clause says. Stay alert.
insurance premiums
143
Alright... so can the debtor waive the right to redeem when they originally sign up for a mortgage!?
hell NO
144
If a state allows for ____ redemption... the mortgagor can simply pay the _____and it nullifies the foreclosure sale.
Pay attention my Goats... the price they have to pay to take back the property is the the foreclosure sale price (PLUS ___)... NOT the amount of the original debt.
statutory
foreclosure sales price
INTEREST
145
Every co-owner of a property encumbered by a mortgage is liable for ___ of the mortgage.
100%
146
They like to be like "Johnny and Mark were tenants in common. They took out a mortgage on their property. Johnny wanted out of the mortgage so he tried to pay 50% of it and demanded a release from his share of the mortgage."
Um... no.
You gotta pay all that shit to free the property of the mortgage.
Not just 50%.
They are both jointly and severally liable for that mortgage.
You can't mortgage only part of a property. That wouldn't even make sense. Because the bank needs to foreclose if you don't pay and their remedy is to sell the WHOLE damn property. Who tf ever sold half a house?! Oh... I have HALF A HOUSE for sale... please enjoy. Hell no.
So when that mortgage drops on a house... everyone has to pay. Nobody can get out of it until the whole thing is paid off.
147
Several renegade Goats coined this mnemonic in the July 2023 cycle and it has never left our group.
Mangoes for Nutrition stands for the idea that a Mortgage follows a Note transfer.
148
note v. mortgage
A promissory note is just an IOU... it says "hey, I promise to pay Mr. Bank back their money. I won't let you down Mr. Bank."
The mortgage allows for the bank to reach out and grab our land if we break our promise and don't pay Mr. Bank back. It's a document that says "if you don't pay back your IOU... we are seizing your land and selling it"
149
Mangoes for Nutrition
When the investor got the fucking note, he also got the fucking mortgage.
150
But what happens if you simply assign the mortgage without the underlying IOU Note... does it work backwards? Does the note follow the mortgage?
Absolutely not. You don't get shit. You have an imaginary nothing.
151
In summary, when someone gets assigned a note in a J24 problem, the ___ will follow.
mortgage
152
If the bank or lender (mortgagee) tells the borrower (mortgagor) that they transferred the note... the mortgagor cannot pay the original mortgagee... they gotta pay the ___ it got transferred to.
third party
153
What happens if we don't tell the borrower that we transferred the note?
If the bank doesn't tell the borrower the note was transferred to the third party... the borrower can still pay the __ and not the third party.
bank
154
But can the debtor-mortgagor transfer their mortgage?
Yes, they can. And this will almost surely be on the July 2024 test. I don't think I'm even legally allowed to say that since I sell test prep. But I'm saying it. It's going to be on there, it's on there every time. Come arrest me.
155
The mortgage follows a properly transferred ____
Mortgages, like deeds, must also be __
note
recorded
156
Let's say on January 1st, Goat takes out a $100,000 mortgage on the Pasture from Fleece & Funds financial. Fleece & Funds records the mortgage on January 2nd. On January 10th, Goat sells Pasture to Walter Flannelshirt (he recently lost his home). Walter has no knowledge of the Fleece & Funds mortgage. Is he liable to pay it?
Yes. It doesn't matter if we are in a notice jurisdiction (where Fleece & Funds would win since they recorded) or in a race-notice jurisdiction (where Fleece & Funds would win since they won the race to record AND Walter was on record notice of their mortgage)... Walter now has the fucking mortgage.
157
What happens at closing when someone buys a home with an existing mortgage on it?
158
if the problem says the buyer assumed the mortgage, BOTH the _____ mortgagor and the buyer are liable on it or ANY deficiency judgment after a foreclosure sale
original
this means that the buyer is PRIMARILY liable and the original mortgagor is SECONDARILY LIABLE
159
someone assumes he. mortgage:
Assume. Both (Liable)
Anxious Beavers
160
If a new buyer takes subject to a mortgage, they are agreeing to make the mortgage payments without formally transferring the mortgage into their name.
The buyer has NO PERSONAL LIABILITY on the mortgage when they take subject to the mortgage. Literally NONE.
161
Due on sale clauses are both ___ and ____ and they are NOT a restraint on alienation. They can and will test this on J24, so keep your heads on a swivel.
valid and enforceable
162
Goat-Note: An installment contract (where someone doesn't get title until they make the last payment) will trigger a _____ as well. Even though you're not FULLY conveying title to someone until they pay the last payment... you're still conveying equitable title to them... so the lender is still not fucking with you and will make you pay your whole mortgage the moment you do this.
due-on-sale clause
163
for a deed in lieu of foreclosure, the transaction must be ____ and ____
fair and equitable
164
for a deed in lieu of foreclosure, the deed must be effective ______
immediately
you cannot say - yea, take the deed, but you cannot sell the house right away Mr. Lender
(present transfer)
165
Sometimes the bar exam will have a question where the borrower in default gives a deed in lieu of foreclosure... and they try to walk away thinking they are debt free of all claims on the property.
NO
you SITLL have to pay off LIENS
the only thing that you are free from is the MAIN mortgage loan, not the juior liens
166
a private rule may not violate a ______ but the two may coexist
zoning ordinance
167
if both a private rule and zoning ordinance are in place, the rule will be enforceable if it does not _____ or _____ the zoning ordinance
weaken or violate
168
