Property lawLesson 2 of 2 in the course Acquisition and transfer

Mortgage Law: Forms, Redemption, Foreclosure, and Priority

5 flashcards · 5 quiz questions · 5 match pairs · 5 fill-in sentences · English

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Summary

A mortgage is a legal arrangement that secures a debt with an interest in real property. This lesson explains what a mortgage does, how it differs from the debt itself, and who takes part in a typical mortgage transaction.

A mortgage is a legal instrument that gives a lender a security interest in real property to secure a debt, commonly a mortgage loan. It is not itself the debt. Rather, it is the legal security supporting the borrower’s obligation to repay.

All flashcards

Mortgage
A security interest in real property that secures a debt; it is distinct from the repayment obligation.
Equity of redemption
The borrower’s equitable right to recover mortgaged property by satisfying the debt, subject to legal process.
Wadset
An early arrangement transferring ownership of land to a lender with a right of later reconveyance.
Equitable mortgage
A security arrangement that equity may recognize even when legal-mortgage formalities are absent.
Mortgage note
The debt instrument that evidences the borrower’s payment obligation.

Quiz questions

  1. Under a mortgage by legal charge, what is the usual legal position before foreclosure?Answer: The borrower remains legal owner, and the lender holds enforceable security rights.
  2. What generally distinguishes a non-recourse loan from a recourse loan after a foreclosure sale?Answer: A non-recourse loan generally limits recovery to the mortgaged property.
  3. Under lien theory, what interest does a mortgage generally create?Answer: A lien on the property, while the borrower retains legal and equitable title.
  4. Under the inverse order of alienation rule described for divided land, which property is generally reached first after default?Answer: Land retained by the original mortgagor, followed by sold parcels in reverse sale order.
  5. Absent applicable recording rules or statutory exceptions, which mortgage lien is generally senior?Answer: The lien that attached earlier.

Based on the Wikipedia article Mortgage law, licensed CC BY-SA 4.0. Adapted into a summary, flashcards and quizzes.

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