Elements of a Mortgage
Debt,Security interest (the note), Writing (legal mtg), or physical delivery of deed (equitable mtg)
How does ME transfer interest in mortgage?
Assignment, orEndorse and deliver note to holder in due course (HDC)
HDC protected from "personal defenses
HDC can foreclose on property, despite MR's assertion of "personal defenses"E.g., lack of consideration, fraud in the inducement, unconscionability, estoppel
HDC not protected from "real defenses" (MAD FIFIIII)
Material AlternationDuressFraud In the Factune (e.g., lie about legal effect of instrument)IncapacityIllegalityInfancyInsolvency
Assumption of mtg. versus Taking Subject to mtg.
Assumption--personal liability (recourse)Taking subject--no personal liability (nonrecourse)
Foreclosure
Requires judicial actionCreditors paid in order of priorityJunior liens terminated; senior liens remain on propertyMR entitled to surplus (if any)
Equity of redemption
MR can redeem up until foreclosure sale--pay remaining balance (and all other costs)Right to redeem in equity cannot be waived
Statutory redemption
Can redeem w/i 6 months of foreclosure sale (pay foreclosure sale price)NY�no right to statutory redemption in NY