Additional Real Estate

Front 1

REMEDIES FOR IMPROPER FORECLOSURES

Back 1

Available to JLH and mortgagors
1. Injunction
2. Suit to set aside foreclosure
3. Suit for damages

Front 2

Injunction (Improper foreclosure)

Back 2

1. Only available before the sale is consummated.
2. Can usually only be brought if there is a defense to the sale, i.e. if the sale shouldn’t have happened at all.
3. Usually requires a bond by the mortgagee in case they are wrong

Front 3

Suit to set aside foreclosure (Improper foreclosure)

Back 3

1. Available after the foreclosure has happened
2. Can be based on:
a. A defense to the sale (Void): If this is the case, then the sale will be considered void and it is a perfect defense, even against a BFP.
b. Improper operation of sale (Voidable): Results in a do-over, and a avoidable title. Here the mortgagor cannot get the title back from a BFP

Front 4

Suit for damages (Improper foreclosure)

Back 4

1. Available if the property has been conveyed to a BFP
2. Mortgagor or Jr. Lien holder can seek damages from the trustee or foreclosing mortgagee.
3. Measure of damages:
a. Mortgagor: FMV – Liens against the property. This is the same as equity,
b. Jr. Lienholder: The lesser of:
i. FMV – Senior liens; OR
ii. Their debt

Front 5

price-level adjusted mortgage (PLAM)

Back 5

- mortgage interest rates reflect real rate of return (maybe 4%), plus additional component for lender’s estimate of inflation
- lender charges only real rate of interest, but loan’s outstanding principal adjusted periodically to reflect changes in inflation

Front 6

Shared Appreciation mortgage (SAM)

Back 6

Lender offers a reduced interest rate, in exchange they get a predetermined percentage of the properties appreciation at the end of the contract.

Front 7

graduated payment mortgage (GPM)

Back 7

– designed to make housing more affordable
– interest usually fixed for loan life, but payments increase by X percent each year for first Y years of loan then remain constant for remainder of the term
– if payment increase not too steep -borrower’s income should have increased enough to cover it (assuming they haven’t lost job etc.)