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9 Cards in this Set
- Front
- Back
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What is the difference between a mortgagor and a mortgagee?
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Mortagagor- fee simple owner
Mortgagee – the financing equity |
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May a third party benefidciary K be formed after there is a brake in assumption?
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Assume mtg payable to the bank -->TPB K
Another Assumption --> another TPBK Subject to --> no TPB K (this is called a break in the assumption) Assumption --> Tpb Under assumption the old owner is liable unless you have a novation. Subject to- O owes bk 500,000 N1 buys house from O and takes subject to the MTG- there is no promise by N1 to pay off the mortgage. |
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What is the equity?
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Sell for 100k on a 75k mortgate the equity IS $25K
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S decides to sell her equity in ther home to V her neighbor. V was not able to finance her own motgage so S agreed to let V assume her mortgage commitment to the bank. V then paid off the equity to S. V made the required payments than stopped. The bank forclosed and sold the prop. It id not pay off the debt and there was a deficiency. Does S still ow the debt to the Bank?
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Both are liabile unless there is a novation
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What is the difference between assuming the mortgage and taking the mortgage subject to?
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Assumption- means the buyer takes a person liability to make the payments. The old owner is liable unless you have a novation There is a tpk
Subject to- no TPB...Subject to- O owes bk 500,000 N1 buys house from O and takes subject to the MTG- there is no promise by N1 to pay off the mortgage. |
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If a buyer takes a house subject to the payments and they no longer make payments is the old owner liable? and can they sue the new owner for the payments?
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Yes the old owner is still liable. And no you can not sue because they never made a promise to pay under the language of "subject to"
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If the bank who gave out the mortgaee to the owner number two sued turned around and sued them for the money would they prevail?
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Yes because with subject to there is a greater risk to
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Why whould the someone want to purchase another's equity in a property under subject to?
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She does not have to shoulder the burden. Gain security from future liability
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What happens if there is a break in the chain of assumptions?- May you have subsequent k after a “subject to”?
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Problem 180
This is the break in assumptions- May you have subsequent k after a “subject to”? Once you have a subject to you can have no further tpb k. since a promise to pay nothing can not be transferred. Majority says that it makes no difference. You may have subsequent TPB K’s after a “subject to” Who does the majority position favor? The bank? Majority- the bank wins. Minority clark wins. Clark Bank Scarlette- Regardless of where the third party arises. Run the white sheet all the way through. |
