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8 Cards in this Set
- Front
- Back
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When can the mortgagee/lender take possession? -lien vs. title state |
In a lien theory state, the mortgagee/lender cannot take possession prior to foreclosure because the lender has a lien until the foreclosure is complete. In a title theory state, the lender has the right to possess the property at any time as they are the holder of title. |
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Define the Equity of redemption |
-A common law right held by the mortgagor to reclaim title and prevent foreclosure on full payment of the debt. Mortgagor must exercise this right before the foreclosure sale. |
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Define "Deed in lieu of foreclosure" |
Conveyance of deed back to the lender in exchange for release from outstanding debt. |
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Define "foreclosure" |
Foreclosure is the forced sale of an asset to pay off a debt. |
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What are the 2 common methods of foreclosure? |
1. Judicial Sale: Sale supervised by the court 2. Power of Sale: Sale held by the lender |
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How are debts satisfied by foreclosure? |
First, determine if the interest is a senior or junior interest. Junior interests do not survive the foreclosure. Surviving debts are satisfied chronologically (first in time rule). There are some exceptions to this. |
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Exceptions to the first in time rule? |
1. Purchase-money mortgage- has priority over all other mortgages. 2. Recording Act exception- when the senior mortgage doesn't get recorded. 3.Subordination agreement 4. Mortgage modification- only the modification becomes inferior 5. Future-advance mortgages. |
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Define Statutory redemption |
Some states allow the mortgagor to redeem property even after the foreclosure sale if they meet with the state's statute. |
