Business law chapter 26 midterm 2

third person in surety arrangement

• a statute that prohibits deficiency judgments regarding certain types of mortgages, such as those on residential properties.
• Second mortgages usually are not protected by anti-deficiency statutes

the lender in a deed of trust

any property put up as a security interest in case of default

A contractor’s, laborer’s, supplier’s, or design professional’s statutory lien that makes the real property to which services or materials have been provided security for the pay-ment of the services and materials

laws that protect borrowers from abusive lending practices

federal statute requires disclosure of credit terms on credit card and charge card solicitations and applications. the APR, annual membership fee, minimum or fixed finance charge, transaction charge for use of the card for purchases, and a statement that charges are due when the periodic statement is received by the debtor

agency that is responsible for enforcing federal consumer financial protection statutes

where one records a mortgage or deed of trust.

when one party makes a loan to another party

adds additional disclosures

Information about a person's credit history that can be secured from a credit reporting agency

person lending the credit

people collecting debt and prohibited from certain practices thanks to the Fair Debt Collection Practice Act

borrower

an instrument that gives a creditor a security interest in debtor's real property that is pledged as collateral for a loan. it is a three party instrument

when you are unable to pay a credit or loan

when acquiring the mortgaged property is under the value of the loan, the lender may go to a court to seize the borrowers other property

statute that prohibits discrimination in the extension of credit based on sex, marital status, race, color, national origin, religion, age, or receipt of income from public assistance programs

statute that protects a consumer who is the subject of a credit report by setting rules for credit bureaus to follow and permitting consumers to obtain information from credit reporting businesses

qLimits debt collector from abusive, deceptive and unfair practices

qDebt collectors can’t:

qHarass, abuse or intimidate,

qMake false or misleading misrepresentations, and

qUse unfair or unconscionable practices

first mortgages that are taken out to purchase houses

a legal procedure by which a secured creditor causes the judicial sale fo the secured real estate to pay a defaulted loan

third person in guaranty arrangement

third party promises to be secondarily liable for the payment of another's debt, when the borrower is unable to pay and creditor has exhausted all other options.

it would be pointless to sue because they have no property to take

an arrangement in which the owner of real property sells property to a purchaser and extends credit to the purchaser

written document signed by a contractor waiving his statutory lien against real property

arrangement where an owner of property borrows money from a lender and pledges the real property as collateral to secure the repayment of the loan

debtor of the mortgage

creditor in mortgage

the mortgage is still legal, but failure to record properly is not effective against either A. subsequent purchasers of the real property or B. other mortgagees who have no notice of the prior mortgages

EX: Eileen purchases a house for $500,000. She borrows $400,000 from Boulevard Bank and gives the bank a mortgage on the house for this amount. Boulevard Bank fails to record the mortgage. Eileen then applies to borrow $400,000 from Advance Bank. Advance Bank reviews the real estate recordings and finds no mortgage recorded against the property, so it lends Eileen $400,000. Advance Bank records its mortgage. Later, Eileen defaults on both loans. In this case, Advance Bank can foreclose on the house because it recorded its mortgage. Boulevard Bank, even though it made the first loan to Eileen, does not get the house and can only sue Eileen to recover the unpaid loan.

an instrument that is evidence of a borrower's debt to the lender

recorders office for proper lien

a power stated in a mortgage or deed that permits foreclosure without court proceedings and sale of the property through an auction

in a surety agreement, the creditor can ask the borrower or the surer for a defaulted payment

satisfaction of a mortgage that must be noted in the recorder's office

mortgages and deeds of trust must be recorded in the county's office

ability to pay in full (principal, interest, and other costs) after default, usually after 6-12 months of the foreclosure

liability for a guarantor

credit given after receiving security interest as collateral

owner borrows money from a lender and pledges real estate as security for repayment of the loan

qThird person (aka surety) promises to be primarily liable for another person’s debts

qBoth parties are primarily liable for debts

legal title to the real property is placed with him until the amount borrowed has been paid full

owner debtor/ borrower

credit is given without security interest as collateral and the creditor can go to court to receive payment