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Chapter 9 ________________ Mortgages and Notes

Chapter 9 ________________ Mortgages and Notes. Promissory Note. Contract between a borrower and lender Obligor, obligee Principal Acceleration clause Signature. Note and Mortgage Sequence. Step 1 Buyer gives note to lender and receives $$

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Chapter 9 ________________ Mortgages and Notes

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  1. Chapter 9________________Mortgages and Notes

  2. Promissory Note • Contract between a borrower and lender • Obligor, obligee • Principal • Acceleration clause • Signature

  3. Note and Mortgage Sequence • Step 1Buyer gives note to lender and receives $$ • Step 2Buyer pays $$ to seller and receives deed • Step 3Buyer has clear title and gives mortgage to lender

  4. The Mortgage Instrument A separate agreement from the note that provides collateral to the lender to back up the promise made in the note by the borrower/mortgagor.

  5. Promissory Note Secured by Mortgage

  6. Covenants (promises) • Covenant to pay taxes • Covenant against removal • Covenant of insurance • Covenant of good repair • Covenant of preservation & maintenance

  7. Debt Priorities • First mortgage / Senior mortgage • Second mortgage / Junior mortgage • Subordination • Chattel liens • Foreclosure / Power of Sale

  8. Mortgage Satisfaction • Partial release • Subject to • Assumption • Novation • Estoppel

  9. Overview of Mortgage Foreclosure

  10. Acceleration clause Deficiency judgment First mortgage Foreclosure Junior mortgage Mortgage Mortgagee Power of sale Promissory note Subordination Key Terms

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