Real Estate Chapter 11 and 20

A material breach in the borrower’s promise to the lender.

A creditor whose loan has collateral (for example, real property) used to secure the repayment of the debt in the event of a default.

An agreement to restructure a loan.

• Five Step to Workout
• 1. Promissory note
• 2. mortgage or DoT
• Any modifications or amendments to the note and deed of trust, including partial releases of property securing the repayment
• All notices, real estate title documents, and correspondence

A written agreement between the lender and borrower to permit negotiation of the loan terms while preserving the rights and remedies of each party.

A deed given by the borrower transferring title to the lender to satisfy a loan default.

A sale that occurs when a lender allows a property to be sold for less than the current amount owed to the lender under the note and secured by a mortgage or deed of trust.

A legal proceeding whereby a third party is assigned to preserve or manage assets.

A person appointed by the court or the parties to preserve or manage assets in a receivership.

A procedure following a default, in which property serving as security for the loan is sold with proceeds applied to retire the debt.

Foreclosure through the court system

1.File and serve complaint for judicial foreclosure

2.Trial of foreclosure sale

3.Order for a foreclosure sale issued

A written notice that a lawsuit has been filed concerning real estate, involving either the title to the property or a claimed ownership interest in it. The notice is usually recorded in the land records of the county in which the property is located.

The right of a borrower to redeem (retain) the mortgaged property before a foreclosure sale occurs.

The right of a borrower to redeem (retain) the mortgaged property after a foreclosure sale occurs within a time period established by state law.

As used in real estate, a manifestly and grossly unjust sales price.

Standard that infers the inadequacy of price should be gross and the result of any mistake, accident, surprise, fraud, misconduct, or irregularity for the sale to be set aside.

Document given to purchaser at a foreclosure sale certifying that, after the redemption period passed, holder received title to foreclosed property.

A foreclosure that occurs without court involvement if the lender properly and timely gives notice of the foreclosure for the statutory periods of time.

Right of secured creditor to bid the amount owed to the creditor at the time of the foreclosure sale.

A foreclosure where, if the borrower does not pay within the court-designated time, the title to the property vests in the lender without any sale of the property.

Rule stipulating the order of payment wherein the first-priority debts are paid in full before any second-tier debts are paid.

A money judgment obtained by the creditor against the borrower when the foreclosure sale does not satisfy the entire debt.

A secured obligation or debt that is secured by a pledge of collateral, typically real property, but for which the borrower is not personally liable. Following the sale of the collateral due to default, the lender’s payment is limited to the proceeds of the sale of collateral.

A contractor hired directly by an owner of real property to construct an improvement to the land.

A contract created between the owner and the prime contractor chosen to complete the project.

A contractor hired by a prime contractor to perform specific construction-related tasks on a construction project.

A contract where the contractor agrees with the owner to build the structure for a fixed fee, and the contractor can increase its profit margin by building the project less expensively.

A contract where the contractor is paid its costs plus an amount for overhead costs and profit.

A contract where the contractor agrees with the owner to build the structure for a guaranteed price where the contractor bears the risk in the event the project costs more than anticipated to construct.

A recorded legal instrument by which property acts as security for the repayment of a debt.

 A mechanic’s lien is a lien that encumbers real property.

A lien that attaches to a particular parcel of land only.

Example: Brooke hires a contractor to perform work on her property. She does not pay the contractor for work performed, and the contractor records a mechanic’s lien on the title to her property. The mechanic’s lien is an example of a specific lien.

A specific lien recorded by a contractor, subcontractor, or material supplier for unpaid sums owed under a construction-related contract.

A notice given to property owners alerting them that persons performing work on a project expect to be paid.

A notice that construction activities have completed. This starts the time to record mechanic’s liens.

means “pending action.” A lis pendens is recorded in the same location as the mechanic’s liens are recorded. When it is recorded on the title to property, a lis pendens provides constructive notice to prospective buyers and lenders that another person has a claim that could result in a court order requiring the sale of the property to satisfy that person’s claim.

A statutory remedy allowing an unpaid subcontractor or material supplier to reach the unexpended construction funds held by the owner.

A bond guaranteeing that all claims for labor, material, equipment, and services provided to the project will be paid.