Exam 20: Mortgages, land Contracts, and the 21st-Century Financial Crisis

Fred Farmer,the mortgagor,is automatically entitled to a jury trial when Big Bank attempts foreclosure on his farm.

Under a ________,the mortgagor conveys his or her interest in the property to a disinterested third party,known as a trustee.

Brianna is purchasing an apartment building from Austin that already has a $500,000 mortgage on it.Brianna is uncertain if she can make money on this purchase and certainly does not want the responsibility of paying the mortgage.Discuss how Brianna might structure this purchase to avoid responsibility for the preexisting mortgage.

If a property owner executes a junior mortgage on a parcel with an existing mortgage,the junior mortgage is superior to the first.

Morey purchased a house for $150,000,paying $15,000 in cash and giving a mortgage to BigBank for the balance.When Morey defaulted on the loan,BigBank foreclosed and sold the house for $25,000 less than Morey owed.Morey believed he no longer owed BigBank any money.Discuss the case.

According to the UCC,conflicting secured interests are generally resolved:

A(n)________ agreement is a written contract which identifies the secured goods and is signed by the debtor.

When two or more parties have unperfected security interests in the same collateral,the first to attach prevails over the other parties.

When a borrower does not qualify for a conventional mortgage,he will automatically qualify for a subprime loan.

A furniture store that puts up its inventory as collateral for a loan will grant the lender a floating lien.

Friendly Furniture Co.wants to repossess a sofa in Ed's living room,but Ed refuses to allow the repossession crew into his house.Discuss what options Friendly has.

A(n)________ is a transfer of an interest in real property for the purpose of creating a security for a debt.

A(n)________ provision in the security agreement allows the security interest of the creditor to also apply to goods the debtor acquires at a later time.

An adjustable-rate mortgage involves no government backing unless the interest rate rises by 1%.

A security interest is created by a security agreement,which identifies the goods and is signed by the creditor.

A point is a one-time charge equal to ________ of the principal amount borrowed.

The mortgagor has the unrestricted right to sell,assign,or transfer the mortgage to a third party.

The Raymonds financed the purchase of their house through Reed Bank,a local bank with branches in Houston,where the Raymonds lived.The family made their mortgage payments punctually each month at the nearby branch.However,without prior warning,Reed Bank assigned the mortgage to Stanley Savings Bank located in Washington.Discuss the rights of Reed Bank in making this assignment and if the Raymonds can avoid the inconvenience of dealing with Stanley Savings Bank.

A financing statement must give the names of the creditor and describe the collateral with precise legal terminology.

The process of ________ occurs when many mortgages are bundled together and sold as bonds to institutions,such as pension funds.