Real Property 10

  1. Elements of a Mortgage
    • Debt,
    • Security interest (the note),
    • Writing (legal mtg), or physical delivery of deed (equitable mtg)
  2. How does ME transfer interest in mortgage?
    • Assignment, or
    • Endorse and deliver note to holder in due course (HDC)
  3. HDC protected from "personal defenses"
    • HDC can foreclose on property, despite MR's assertion of "personal defenses"
    • E.g., lack of consideration, fraud in the inducement, unconscionability, estoppel
  4. HDC not protected from "real defenses" (MAD FIFIIII)
    • Material Alternation
    • Duress
    • Fraud In the Factune (e.g., lie about legal effect of instrument)
    • Incapacity
    • Illegality
    • Infancy
    • Insolvency
  5. Assumption of mtg. versus Taking Subject to mtg.
    • Assumption--personal liability (recourse)
    • Taking subject--no personal liability (nonrecourse)
  6. Foreclosure
    • Requires judicial action
    • Creditors paid in order of priority
    • Junior liens terminated; senior liens remain on property
    • MR entitled to surplus (if any)
  7. Equity of redemption
    • MR can redeem up until foreclosure sale--pay remaining balance (and all other costs)
    • Right to redeem in equity cannot be waived
  8. Statutory redemption
    • Can redeem w/i 6 months of foreclosure sale (pay foreclosure sale price)
    • NY—no right to statutory redemption in NY
Card Set
Real Property 10
Real Property 10 - Mortgages