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19 Cards in this Set
- Front
- Back
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Security Interests in Real Property
Definition |
Device used to secure a loan on property.
Usually: 1) loan = promissory note 2) security interest = separate written instrument |
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Security Interests in Real Property
Mortgage |
Mortgagor = Debtor
Mortgagee = Lender Given buy Mortgagor to Mortgagee. If loan not paid in full, sheriff sells land in court-ordered foreclosure. |
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Security Interests in Real Property
Deed of Trust (2) |
1) given by a debtor to a third-party trustee
2) holds deed of trust until loan paid in full 3) if loan not paid, trustee can -obtain court order for foreclosure or sale of property -trustee can sell himself or herself in a public auction |
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Security Interests in Real Property
Land Sale Contract (2) |
1) Debtor signs contract promising to make payments to seller/lender
2) Seller keeps title to property until loan paid in full |
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Security Interests in Real Property
Debtor's Right of Redemption |
1) up to moment of foreclosure sale, debtor can redeem property
2) By paying amount that is due and payable 3) By paying amount in arrears (plus interest) and REDEEM PROPERTY ***subject to acceleration clause*** |
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Security Interests in Real Property
Debtor's Right of Redemption Acceleration Clauses |
Debtor must pay off entire balance of mortgage in order to redeem property
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Security Interests in Real Property
Debtor's Right of Redemption Waiver |
Original Mortgage -- Cannot be waived
Subsequent Mortgage -- Can be waived if separate consideration for waiver ***otherwise, CLOGGING equity of redemption and prohibited*** |
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Security Interests in Real Property
Multiple Mortgages Priorities on Payment |
1) First in time, first in right
2) UNLESS changed by applicable recording statute (recording law in Jx applies) |
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Security Interests in Real Property
Multiple Mortgages Priorities Changed by K Voluntary Subordination |
Senior mortgage may agree to subordinate a junior mortgage
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Security Interests in Real Property
Multiple Mortgages Purchase Money Mortgages (PMM) |
PMM receives priority over any other mortgages executed about the same time
EVEN if other mortgages recorded first PMM by seller gets priority over PMMs by third-parties |
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Security Interests in Property
Priorities on Payment of Multiple Mortgages Changes in Senior Mortgages |
If mortgagor increases senior mortgage, modification does not keep senior mortgage's priority
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Security Interests in Property
Priorities on Payment of Multiple Mortgages Foreclosure |
Junior Interests = extinguished
Senior Interests = continue in place, buyer takes subject to senior interest Junior interests are a necessary party to any foreclosure |
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Security Interests in Property
Priorities on Payment of Multiple Mortgages Payment of Proceeds from a Foreclosure Sale |
1) Costs of foreclosure
2) Mortgage foreclosed on 3) Junior interests -- in order of priority 4) Any remaining balance to the borrower/mortgagor |
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Security Interests in Property
Priorities on Payment of Multiple Mortgages Anti-Deficiency Statutes |
If foreclosure sale does not raise sufficient funds to pay off mortgage, can sue Debtor for remaining balance due on note.
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Security Interests in Property
Priorities on Payment of Multiple Mortgages Forfeiture Clauses |
If Debtor misses payment, Seller can:
1) Cancel K 2) Keep monies paid to date 3) Retake property Bar = OK; Real Life = COURTS HOSTILE |
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Security Interests in Property
Transfer |
When Grantor transfers title, Grantee automatically takes subject to mortgage.
Mortgage still needs to be paid. Or else, mortgagee will foreclose on property. Grantee "subject to" losing property in a foreclosure sale. |
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Security Interests in Property
Mortgagee's Transfer of Note |
Mortgagee can freely transfer note
Mortgage always follows note it secures |
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Security Interests in Property
Due on Sale Clauses |
If mortgagor transfers property without mortgagee's consent, entire balance of loan becomes immediately due and payable
Bar = OK |
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Security Interests in Property
Interests in Fixtures |
Seller of fixture who provides purchase money security interest in chattel must make a UCC Article 9 fixture filing within 20 days after attachment
Seller may then remove fixture w/o regard to priority of earlier mortgage |
