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27 Cards in this Set
- Front
- Back
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To be enforceable a mortgage must
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1.) be in writing
2.) supported by consideration (and all other contract principles 3.) recorded |
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What types of lien trigger the doctrine of instantaneous seisin?
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Prior Judgment Liens
Mechanics Liens |
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What types of liens benefit from DIS
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Purchase Money Mortgages
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When does the Article 9 creditor get priority over any and all mortgagee's interest?
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- If the Article 9 Creditor has a purchase money security interest (PMSI) AND
- the Article 9 creditor made a UCC fixture filing before the goods were affixed to the real estate or within 20 days thereafter |
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What is the general rule in determining priority?
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First in time, first in right
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What are the exceptions to the first in time/first in right priority schedule?
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1.) PMSI
2.) Doctrine of Instantaneous Seisin 3.) NC property taxes |
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When must a purchaser raise an objection to the validity of the foreclosure sale?
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- Judicial Foreclosure: during the foreclosure proceeding
- Power of Sale: Traditional Rule: at any time even a/g later buyers of the property. Modern Law: Ojbections that are not raised during the presale hearings are deemed waived. |
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When must objections to the way the Foreclosure and Sale were conducted be raised?
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- Judicial Foreclosure: objectsion about the manner in which the foreclosure or the sale were conducted must be raised at the confirmation hearing.
- Power of Sales: Objections can be raised until the property moves into hands of BFP. (but watch out for estoppel or laches) |
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Requirements for Upset Bid:
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- 10 days after the filing of the preliminary report of the sale
- 5% or $750 of winning bid - Accompanied by a bond that is at least 5% of winning bid, minimum of $750. |
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The Clerk Considers 4 issues at a pre-sale hearing:
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1.) Is there a valid debt?
2.) Is the power of sale authorized? 3.) Has there been a default? 4.) Has notice been given to the parties. |
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What are the consequences of not providing notice to a person liable on the debt?
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the creditor cannot recover a deficiency from that person who was not given notice
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Is there a common law right to foreclosure under a power of sale?
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NO: a power of sale foreclosure is only authorized if the mortgage contains a power of sale clause.
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In a judicial foreclosure, what are the consequences when a necessary party is not joined?
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That necessary party's interest in the land is unaffected by the foreclosure sale.
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What happens if the foreclosure sale nets less than the amount owed on the debt?
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The general rule is that creditor is entitled to pursue a deficiency judgment against the debtor
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What are the exceptions to the creditor's right to seek a deficiency judgment?
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1.) The purchase money Exception
2.) The purchasing creditor exception 3.) Omitted Notice Exception |
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What are the elements of a purchase money exception?
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1.) The mortgagee is the seller
2.) the mortgage secures the purchase price. 3.) the mortgage documents state they arise from purchase transaction. |
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Can the buyer waive his right of protection of the Anti-Deficiency Statute?
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Yes- so long as the seller gives the buyer separate consideration.
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What are the elements for a Purchasing Creditor Anti-deficiency Statute?
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1.) the foreclosure sale must be held in power of sale and NOT formal judicial foreclosure.
2.) the creditor-mortgagee must purchase property at foreclosure sale 3.) the creditor-mortgagee must buy property at less than FMV 4.) the creditor-mortgagee must sue debtor for deficiency. |
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Formula for Purchase-Creditor Anti-Deficiency Statute:
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FMV-Purchase Price= Amount of liability that will be deducted from Debt.
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Who has a right to the equity of redemption?
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1.) the mortgagor
2.) Transferee 3.) Anyone else w/ interest in property |
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How much a defaulting party tender to satisfy the equity of redemption?
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The amount of existing debt PLUS any expenses incurred for foreclosure proceeding
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When is the ONLY time a debtor can agree to abandon equity of redemption?``
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an agreement will be valid if the agreement arises after the original agreement and the creditor gives debtor fair value for his/her equity.
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How do you terminate a mortgage?
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Either 1.) Pay the MORTGAGEE the outstanding debt or 2.) Come to an agreement supported by either CONSIDERATION or DETRIMENTAL RELIANCE to compromise the debt
3.) Someone shows up at the Registrar of Deeds with the possession of the mortgage note marked "paid" and signed by the mortgagee |
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When will the original debtor be discharged from the debt?
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1. if the original debtor transfers title to a transferee and there is a novation between creditor and transferee.
2. the buyer assumes the debt and there is a modification |
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When will the original debtor be discharge to the extent of the value of collateral?
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1.) When there is a release of collateral, regardless of subject or assumption
2.) subject to and modificaiton. |
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What is the burden and requirements that a grantor must satisfy to establish that he gave a mortgage to the grantee and not payment?
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Clear and convincing evidence evidence that the mortgage language was omitted as a result of fraud, duress, mistake.
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What is some good evidence that there was a mortgage and not an absolute deed?
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- there is a disparity b/w the value of the property and the amt. of debt.
- the grantor stays on the property and exercises dominion in a conclusive way: tears down structures, builds, grades etc., - at default, grantee still says "you owe me money" - |
