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Unformatted text preview: imposes certain conditions regarding liens and termination of the interest. ASSIGNMENT BY CREDITOR
These security instruments can be transferred like any other property or instrument. However, the note and the security device must go together. Dynasty School (www.dynastySchool.com) 8-37 REAL ESTATE FINANCE
Inseparable Instruments – The assignment of a note requires the assignment of the security interest, and vice versa. • • An attempted assignment of the security interest without the note transfers nothing to the assignee. A transfer of the note without the mortgage or trust deed gives the assignee the right to the security. Recording – Any assignment of the security interest in a mortgage or trust deed may be recorded. This recording gives constructive notice of assignment. After an assignment is recorded, the debtor is not protected if making payments to the original creditor instead of the assignee. TRANSFER OF PROPERTY
Upon transfer of property which has been mortgaged, the property still remains subject to the mortgage. Assumption – By assumption of an existing debt the grantee becomes the primary debtor. Secondary liability still exists, however, for the original borrower unless released by the lender. • • • The person granted the property (grantee) cannot be held liable for a deficiency judgment unless the grantee assumed the mortgage. The mortgagor is still liable for payments to the mortgagee despite the grant unless given a release of liability. For certain purchase money loans, remedy of the mortgagee is against the property only (no deficiency judgment). In Writing – Any agreement by a buyer to pay a debt secured by a mortgage must be in writing. Beneficiary Statement – A “beneficiary statement” is obtained when a new purchaser acquires a mortgage or trust deed which already exists. Furnished by the lender, it is a statement of the current condition of the debt containing: 8-38 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 8: FINANCING INSTRUMENTS
• • • Unpaid balance Interest payments Any other claims that do not appear in the instrument SATISFACTION OF DEBT
A mortgage or trust deed should be terminated when the debt is...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10