Real Estate Finance Law
Authors:
Nelson, Grant S. / Whitman, Dale A. / Burkhart, Ann M. / Freyermuth, R. Wilson
Edition:
6th
Copyright Date:
2015
38 chapters
have results for Real Estate Finance Law
Chapter 3. Mortgage Substitutes 123 results (showing 5 best matches)
- In sum, as the preceding text in this section illustrates, the proper method of perfection of such a security interest has been controversial. Some cases hold that perfection can be accomplished by recording in the real estate records; others that perfection can be accomplished by filing a UCC–1 financing statement; and still others that both real estate and Article 9 financing are necessary to a complete perfection.
- The sale and leaseback is a commonly used method of financing commercial real estate transactions. Although the transactions are often complex, in its common form, an owner sells and conveys real estate to an investor-purchaser (often an institutional lender) who leases it back to the seller on a long-term lease. Often, the lease grants lessee-seller an option to repurchase the real estate upon the expiration of the lease.
- Stated simply, in states where the above title complications to the vendor can occur, the installment land contract can be a “pro-vendee” financing device. Where, for example, such contracts are used in a wholesale fashion as substitute financing devices in low income, low down payment situations, mass recording of such contracts by vendees could increase the vendees’ practical economic interests in the involved real estate and possibly result in pervasive title clouds on substantial amounts of that real estate.
- Why, then, put the pledgee of the vendor’s interest at risk of losing his security in the land if he does not record in the real estate records? Certainly one recording—in the financing statement files—is sufficient, once practitioners and the public know that they must search there. No policy is served by forcing everyone to use both belt and suspenders. The court, we suggest, should simply have carried the mortgage law analogy to its logical conclusion and held the Code filing sufficient for complete perfection. The only objection to this view is that it is contrary to long-established habits in many areas; but once the law is clarified, those habits can readily be changed.
- While it is conceivable that a grantor could sell his interest in his real estate and retain possession as a lessee, the retention of possession by the grantor at least indicates that he retained some interest in the deeded real estate. Moreover, when retention of possession is coupled with substantial improvements to the real estate, the grantor’s case becomes even stronger. In any event, when retention of possession is coupled with favorable evidence based on the two factors discussed previously, the grantor’s case becomes strong indeed.
- Open Chapter
Chapter 11. Government Intervention in the Mortgage Market Part 2 92 results (showing 5 best matches)
- See Jordan, Ups and Downs: A REIT Dilemma, 73 Fla. B.J. 54 (July/Aug. 1999); Witner, REITs: The Revolution in Real Estate Financing, 22 Real Est. L.J. 248 (1994); Winston, Choosing Between Publicly Traded Partnerships and Real Estate Investment Trusts, 2 Prac. Real Est. Law. 19 (No.2, Mar. 1986).
- See Gunning and Roegge, Contemporary Real Estate Financing Techniques: A Dialogue on Vanishing Simplicity, 3 Real Prop. Prob. & Tr. J. 322, 325 (1968).
- See the excellent analysis in Alexander, Federal Intervention in Real Estate Finance: Preemption and Federal Common Law, 71 N.C. L. Rev. 293, 360–370 (1993). We suggest that the announcement ought to be by way of statute or regulation, and not merely by language in the documents. This will encourage consistency in administration, and will subject the decision to public scrutiny in a way that document drafting does not.
- See Hu, Secondary Market: The American Model, Mortgage Banking, Apr.1991, at 14; Bradner, The Secondary Mortgage Market and State Regulation of Real Estate Financing, 36 Emory L.J. 971 nn. 49–68 (1987); Malloy, The Secondary Mortgage Market: A Catalyst for Change in Real Estate Transactions, 39 Sw. L.J. 991 nn.48–62 (1986).
- See generally §§ 8.4 to 8.8 supra (statutory redemption); § 8.3 (antideficiency legislation). See Alexander, Federal Intervention in Real Estate Finance: Preemption and Federal Common Law, 71 N.C. L. Rev. 293 (1993); Note: Toward Adoption of State Law as the Federal Rule of Decision in Cases Involving Voluntary Federal Creditors, 73 Minn. L. Rev. 171 (1988); Note: Federal Housing Loans: Is State Mortgage Law Preempted?, 19 Santa Clara L. Rev. 431 (1979).
- Open Chapter
Chapter 12. Financing Real Estate Construction Part 2 124 results (showing 5 best matches)
- ABA Sec. of Real Prop., Prob. & Trust Law, The Lawyer’s Role in Financing the Real Estate Development 36 (Prob. & Prop. Cassette Series, Vol. 1, No. 3, 1975). See also Goldman v. Connecticut General Life Ins. Co., 251 Md. 575, 248 A.2d 154 (1968).
- Construction Funding: The Process of Real Estate Development, Appraisal, and Finance 172 (Nathan S. Collier et al. eds. 4th ed.2008).
- Nathan S.Collier, Courtland A. Collier & Don A. Halperin, Construction Funding: The Process of Real Estate Development, Appraisal, and Finance 194 (4th ed.2008).
- See Prac. L. Inst., Real Estate Financing: Contemporary Techniques 177–78 (No.14 1973).
- See, e.g., Hidalgo Properties, Inc. v. Wachovia Mortg. Co., 617 F.2d 196 (10th Cir. 1980); Breckenridge Creste Apartments, Ltd. v. Citicorp Mortg., Inc., 826 F. Supp. 460 (N.D. Ga. 1993), aff’d, 21 F.3d 1126 (11th Cir. 1994); B.F. Saul Real Estate Inv. Trust v. McGovern, 683 S.W.2d 531 (Tex. App. El Paso 1984); Prac. L. Inst., Real Estate Financing: Contemporary Techniques 313 (No. 14 1973).
- Open Chapter
Chapter 9. Some Priority Problems 158 results (showing 5 best matches)
- For the intermediate class of fixtures, Article 9 defers to state real estate law the question of when a good becomes a fixture, and instead adopts in U.C.C. § 9–334 a set of rules to resolve priority conflicts between real estate mortgagees and parties holding conflicting interests arising under Article 9. The default priority rule is that an Article 9 security interest in fixtures is subordinate to the conflicting interest of an “encumbrancer” such as a real estate mortgagee. The drafters recognized, however, that fixture priority for real estate mortgagees would in many cases provides such mortgagees with an undeserved windfall not contemplated in the original mortgage transaction. Thus, U.C.C. § 9–334 provides a series of exceptions to the general rule under which an Article 9 fixture secured party can obtain priority over the conflicting real estate mortgagee. In most instances, to qualify for this priority, the fixture secured party must make a proper “fixture filing.” ...law...
- For a consideration of the 1962 fixture provision, see Nelson & Whitman, Real Estate Finance Law § 9.7 (2d ed. 1985).
- See Freyermuth, Of Hotel Revenues, Rents, and Formalism in the Bankruptcy Courts: Implications for Reforming Commercial Real Estate Finance, 40 UCLA L. Rev. 1461, 1533 (1993) (“An agreement to occupy a commercial real estate project fits squarely within the concept of “proceeds” of the project….”).
- If a real estate mortgagee wishes to have senior lien status as to a mortgagor’s after-acquired personal property, how should the mortgagee proceed? Merely recording in the real estate records a mortgage containing an after-acquired property clause that purports to reach personalty as well as realty will not suffice. Unless a chattel security The mortgagee could presumably perfect its interest in after-acquired chattels by filing the real estate mortgage containing the clause in the appropriate office for chattel security filings. However, a conceptually cleaner and more reliable approach simply would be to treat the two types of security separately. Thus the mortgagee should record the mortgage in the real estate records and separately perfect its security interest in after-acquired personal property by filing an appropriate financing statement in the correct filing office.
- In certain limited situations, U.C.C. § 9–334(e) enables an Article 9 fixture secured party to obtain priority over certain conflicting real estate interests by perfecting under Article 9’s regular perfection rules rather than by making a fixture filing. For example, a security interest in fixtures has priority over a real estate mortgagee with respect to “readily removable factory or office machines,” “equipment that is not primarily used or leased for use in the operation of the real property,” or “replacements of domestic appliances that are consumer goods” as long as that security interest is perfected “by any method permitted” in the UCC. The drafters included this provision to alleviate the confusion in various jurisdictions as to whether these types of items are fixtures or pure personalty. In the drafters’ judgment, commercial actors view office machines, stoves, refrigerators, and similar domestic appliances as being in the nature of chattels, even if a jurisdiction’s real
- Open Chapter
Chapter 8. Statutory Impacts on Foreclosure 114 results (showing 5 best matches)
- When a mortgagor files a bankruptcy petition, the mortgagee’s ability to enforce the mortgage loan under state law becomes subject to the substantive and procedural limitations imposed by federal bankruptcy law. Understanding the law of real estate finance thus requires a basic understanding of bankruptcy law.
- A more fundamental reform of the foreclosure sale system is necessary. Not only should the goal be fewer deficiency judgments, but more frequent and larger surpluses which benefit junior lienholders as well as mortgagors. Under such a legislative approach should incorporate the concept of the negotiated sale—in other words one conducted by customary commercial methods used in the sale of real estate in a nonforeclosure setting, including the use of real estate brokers and normal commercial descriptive and pictorial advertising. The Uniform Nonjudicial Foreclosure Act, (“UNFA”) promulgated in 2002 by the National Conference of Commissioners on Uniform State Laws, not only incorporates the negotiated sale concept, it contains numerous provisions that are aimed at making foreclosure both fair and efficient. It is the product of years of drafting and reflects the thinking of many of the nation’s prominent land finance scholars and practitioners. The major elements of UNFA are described...
- they also may discourage vendor financing of residential sales today, when such financing is often crucial to the transaction. Because high interest rates and tight money often prevent many purchasers from obtaining conventional financing, more vendors must finance all or part of the sale of their residences. To deny such vendor-mortgagees deficiency judgments in the event of a foreclosure may deter the use of socially useful financing. Moreover, it is also undesirable to deny a deficiency judgment to a third party purchase money mortgagee. Indeed, it is especially anomalous to penalize the person or institution who enabled the mortgagor to obtain the real estate in the first place.
- This sanction has been rigorously imposed. For example, where a mortgagee first obtained a personal judgment against a mortgagor who consented to its entry, the mortgagee was held to have forfeited the right to foreclose on the mortgaged real estate. Moreover, resort to real estate foreclosure has been barred where the creditor first proceeded against chattel security without simultaneously seeking foreclosure of the real estate. Finally, the Ninth Circuit Court of Appeals held that even where a creditor proceeded properly by one action and included all security, real and personal, but failed after the foreclosure sale of the real estate to seek a “fair value” hearing, it forfeited its security interest in the personality.
- Frequently, commercial real estate projects are owned as “single asset” projects ( the entity created to hold title to the project in question owns no other real estate and engages in no other business). Many have questioned whether bankruptcy law should provide any protection for the owners of such projects. The critique rests upon the view that bankruptcy should facilitate the restructuring of active business concerns— ones that could not realistically negotiate a collective restructuring with hundreds or thousands of individual creditors simultaneously. By contrast, the single asset real estate project involves essentially only one debtor (the property owner) and one creditor (the mortgagee)—who are in a position to negotiate an acceptable restructuring without the need for an intrusive and expensive federal judicial process. Nevertheless, the Bankruptcy Code did not specifically exclude owners of single asset real estate from seeking bankruptcy protection, and owners of...
- Open Chapter
Chapter 5. Transfer by the Mortgagor and the Mortgagee Part 4 104 results (showing 5 best matches)
- See generally Nelson, Whitman, Burkhart & Freyermuth, Real Estate Transfer, Finance and Development 1209–25 (8th ed. 2009); Committee on Leases, Ground Leases and Their Financing, 4 Real Prop. Prob. & Tr. J. 437, 438 (1969).
- For a comprehensive treatment of the provisions of the Act and the Regulation with regard to window period loans, see Nelson and Whitman, Real Estate Finance Law § 5.24, at 505–11 (5th ed.).
- Mortgage assignments are frequently preceded by contracts of sale between the assignor and assignee. See, e.g., United Mortg. Corp. v. Plaza Mortg. Corp., 853 F. Supp. 311 (D. Minn. 1994). This book does not treat such contracts in depth, but good discussions include Stein, Mortgage Loan Assignments: A Primer in Two Parts, Prac. Real Estate Law. 45 (July 1997) and 49 (Sept. 1997); Ellis & Lowry, A Comprehensive Note Purchase Guide (with Forms), Part I, Prac. Real Estate Law. 45 (July 1987); Part II, Prac. Real Estate Law. 49 (Sept.1987).
- See Nelson, Whitman, Burkhart & Freyermuth, Real Estate Transfer, Finance and Development 216–217 (8th ed.2009).
- No endorsement is necessary if the note was originally payable to “bearer;” see Bank of New York v. Raftogianis, 417 N.J. Super. 467, 10 A.3d 236, 240 (Ch. Div. 2010), republished at, 418 N.J. Super. 323, 13 A.3d 435 (Ch. Div. 2010) and withdrawn from bound volume. But bearer notes are virtually never used in real estate financing.
- Open Chapter
Chapter 4. Rights and Duties of the Parties Prior to Foreclosure Part 3 72 results (showing 5 best matches)
- See generally Alvin L. Arnold, 1 Real Estate Transactions: Structure and Analysis with Forms, Appendix 5.3, Checklist of Permanent Mortgage Commitment (2013); Andrea M. Mattei, A Due Diligence Checklist Based on Expansive Representations and Warranties, in Commercial Real Estate Financing: Strategies for Changing Markets and Uncertain Times, in ALI-ABA CLE (2012); K.C. McDaniel, Standard Form of Hotel Loan Agreement, Annotated with Introduction, in Modern Real Estate Transactions: Practical Strategies for Real Estate Acquisition, Disposition, and Ownership 1403–1404, in ALI-ABA CLE (2011); Slavich, As if It Isn’t Enough to Have a Non-performing Loan: Dealing with Environmentally Impacted Distressed Assets, 41 Tex. Envtl. L.J. 29 (2010); Alan Wayte, Selected Issues in the Negotiation of Real Estate Financing Documents, in Commercial Real Estate Financing: Strategies for Changing Markets and Uncertain Times 14–16, in ALI-ABA CLE (2012).
- For an example of a commercial mortgage document containing an assignment of rents, see Nelson, Whitman, Burkhart & Freyermuth, Real Estate Finance Law § 14.09 (6th Pract. ed.).
- See, e.g., Mattei, supra note 818; Schroeder, supra note 819; Michael J. Virgadamo, Financing of Commercial Real Estate, in Florida Real Property Complex Transactions (6th ed.2011).
- Joseph Philip Forte, Proposed CREFC Model Reps, in Commercial Real Estate Financing: Strategies for Changing Markets and Uncertain Times, in ALI-ABA CLE (2012); Schroeder, supra note 819.
- In 2012, the Uniform Law Commission appointed a drafting committee to prepare a new model law governing the appointment and powers of real estate receivers. Final approval of that Act is anticipated in 2015.
- Open Chapter
Chapter 10. Subrogation, Contribution and Marshaling 19 results (showing 5 best matches)
- For the text of §§ 10.2 to 10.8 and 10.10 to 10.15, see Nelson, Whitman, Burkhart & Freyermuth, Real Estate Finance Law, Sixth Edition, Practitioner Treatise, Vol. 2.
- In this last illustration, there is a wide divergence of opinion as to the extent to which ME3’s knowledge or notice of ME2’s lien will deprive ME3 of the benefits of subrogation. The Restatement takes the broad view that ME3 should be entitled to subrogation even if ME3 had actual knowledge of ME2, provided that ME3 “reasonably expected to receive a security interest in the real estate with the priority of the mortgage being discharged, and if subrogation will not materially prejudice the holders of intervening interests in the real estate.”
- Bryson v. Newtown Real Estate & Development Corp., 153 Conn. 267, 216 A.2d 176 (1965). See also Platte Valley Bank of North Bend v. Kracl, 185 Neb. 168, 174 N.W.2d 724, 7 U.C.C. Rep. Serv. 538 (1970).
- See Patrick E. Mears, Who’s on First? Negotiating Debt and Lien Subordination Agreements in Real Estate Transactions, Prob. & Prop., Jan. 1999, at 19.
- “[E]very portion of the real estate embraced within the mortgage was equally burdened with the debt. No part could be relieved of the burden without consent of the mortgagee.” Broughton v. Mt. Healthy Flying Service, Inc., 104 Ohio App. 479, 5 Ohio Op. 2d 224, 143 N.E.2d 597, 599 (1st Dist. Hamilton County 1957). See Schaller v. Castle Development Corp., 347 Md. 90, 698 A.2d 1106 (1997); In re Borges, 184 B.R. 874, 27 Bankr. Ct. Dec. (CRR) 701, 34 Collier Bankr. Cas. 2d (MB) 281 (Bankr. D. Conn. 1995).
- Open Chapter
Chapter 5. Transfer by the Mortgagor and the Mortgagee Part 3 77 results (showing 5 best matches)
- For the text of § 5.13, see Nelson, Whitman, Burkhart & Freyermuth, Real Estate Finance Law, Sixth Edition, Practitioner Treatise, Vol. 1.
- R. Bernhardt, California Mortgage and Deed of Trust Practice 47–48 (1979); 1 H. Miller & M. Starr, Current Law of California Real Estate 179 (Supp.1982).
- See Ashley, Use of “Due-on” Clauses to Gain Collateral Benefits: A Common Sense Defense, 10 Tulsa L.J. 590 (1975); Bonanno, Due on Sale and Prepayment Clauses in Real Estate Financing in California in Times of Fluctuating Interest Rates—Legal Issues and Alternatives, 6 U.S.F. L. Rev. 267 (1972); Gorinson and Manishin, Garn-St. Germain: A Harbinger of Change, 40 Wash. & Lee L. Rev. 1313 (1983); Hetland, Real Property and Real Property Security: The Well-Being of the Law, 53 Cal. L. Rev. 151 (1965); Jennings, The “Due-on-Sale” Bailout for Mortgage Lenders: An Analysis of Its Economic and Legal Soundness, 30 St Louis U. L. Rev. 1151 (1986); Maxwell, The Due-On-Sale Clause: Restraints on Alienation and Adhesion Theory in California, 28 UCLA L. Rev. 197 (1982); Nelson and Whitman, Congressional Preemption of Mortgage Due-on-Sale Law: An Analysis of the Garn-St. Germain Act, 35 Hastings L.J. 241 (1983); Segreti, The Borrower as Servant of the Lender: Enforcement of Mortgage Due-on-Sale...
- Participants often argue that the lead lender owes a fiduciary duty to them. The issue can arise in two distinct contexts. First, conflicts may arise between the lead lender and the participants because the characteristics of the underlying borrower and the real estate never matched the participants’ beliefs or assumptions. For example, the borrower may have had weaker credit, less real estate management experience, lower net worth, and a poorer track record in repaying past loans than the participants understood. Similarly, the real estate may have had a lower value or a lower rate of occupancy by tenants, been in a more risky location, or been more difficult to develop than the participants realized.
- See Williams v. First Federal Sav. and Loan Ass’n of Arlington, 651 F.2d 910, 1981–1 Trade Cas. (CCH) 64095 (4th Cir. 1981), where the court suggested that real estate that would sell for $100,000, assuming the buyer obtained new 30-year fixed rate first mortgage financing at 15% per annum, would sell for $115,000 if the buyer could assume an existing $50,000 fixed rate mortgage at 10% with a remaining term of 27 years. 651 F.2d 910 at 915 n.8. For further consideration of the seller’s situation, see Note, Separating Social Interests from Individual Interests, supra note 334, at 376. See also Sirmans, Sirmans & Smith, The Effect of Assumption Financing on Residential Property Values, 16 Fed. Home Loan Bank Board J., Aug. 1983, at 22 (suggesting that home sellers capture only about 35% of the value of their assumable below-market-rate loans).
- Open Chapter
Chapter 6. Discharge of the Mortgage 108 results (showing 5 best matches)
- For the text of §§ 6.11 to 6.14, see Nelson, Whitman, Burkhart & Freyermuth, Real Estate Finance Law, Sixth Edition, Practitioner Treatise, Vol. 1.
- . As the preceding section outlines, mortgage clauses dealing with prepayment typically do one or both of two things: they “lock in” the loan by prohibiting prepayment, and they permit prepayment only with an accompanying fee. Since the common law regarded mortgages as non-prepayable if they were silent on the matter, it is not surprising that the courts have also routinely enforced lock-ins. They have been attacked most often on the ground that they unreasonably restrain alienation of the real estate, but the courts have nearly always quite correctly rejected this argument. The necessity of selling the real estate with the mortgage on it may reduce the price to the seller, particularly if current financing is available at lower rates, but it certainly does not restrain alienation in a legal sense.
- Bonanno, Due on Sale and Prepayment Clauses in Real Estate Financing in California in Times of Fluctuating Interest Rates—Legal Issues and Alternatives, 6 San. Fran. L. Rev. 267, 295 (1972).
- The massive number of foreclosures following the meltdown of the real estate and mortgage markets prompted several government agencies to streamline and standardize the deed in lieu process as a cheaper and faster alternative to foreclosure. The Federal Housing Finance Agency promulgated deed in lieu guidelines for Fannie Mae and Freddie Mac that became effective on November 1, 2012.
- . When a borrower in bankruptcy prepays a mortgage loan, the lender will not only desire to collect the prepayment fee provided in the documents, but will also wish to treat the fee as secured by the mortgage on the real estate. The argument is relevant, of course, only if the value of the real estate is greater than the balance on the mortgage debt before the additional fee is considered—in other words, the loan itself is oversecured. If the fee is deemed to be unsecured, all or a large part of it will typically be uncollectible as a practical matter. However, claims for “fees, costs, or charges” that accrue after the filing of bankruptcy are secured under § 506(b) of the Bankruptcy Code only if they are “reasonable.” By the predominant view both enforceability under state law and the reasonableness test of § 506(b) must be satisfied in order to include the prepayment fee as part of the lender’s secured claim.
- Open Chapter
Title Page 5 results
Chapter 8. Statutory Impacts on Foreclosure Part 2 119 results (showing 5 best matches)
- For the text of §§ 8.9 to 8.11, see Nelson, Whitman, Burkhart & Freyermuth, Real Estate Finance Law, Sixth Edition, Practitioner Treatise, Vol. 1.
- Nevertheless, a valid mortgage lien generally survives the bankruptcy filing, i.e., the bankruptcy estate takes the mortgaged real estate subject to the continued mortgage lien. the trustee has a practical interest in mortgaged real estate only if the debtor has “equity” in it—i.e., only if the value of the real estate exceeds the total amount of mortgage indebtedness against it. If the debtor has no equity in the real estate, the trustee should (and typically will) abandon it; it makes no sense for the trustee to incur the costs of insuring, preserving, and selling the real estate if those activities will produce no value for unsecured creditors. If the trustee abandons the real estate, title is vested back into the debtor, If instead the trustee concludes that there is equity in the real estate, the trustee can sell the real estate with the approval of the bankruptcy court, either subject to the existing mortgages or (more commonly) free and clear of them. ...state law. If,...
- [M]ost single asset real estate bankruptcies, by their very nature, fit the bad faith standard…. [I]f debtors in single asset real estate cases were deemed to have filed in bad faith due to the very nature of their business, § 362(d)(3) would never have the opportunity to provide relief from the automatic stay to creditors with an interest in single asset real estate cases.
- In the late 1980s and early 1990s, as the commercial real estate market experienced substantial default rates and declines in real estate values, the number of real estate bankruptcy cases (particularly those involving single asset borrowers) increased dramatically. Borrowers facing state law foreclosure sought Chapter 11 relief in large numbers, hoping to use post-bankruptcy net rents to fund the cost of preparing and confirming their Chapter 11 plans. Mortgagees objected, claiming that post-bankruptcy net rents constituted cash collateral and could not be used without providing the mortgagees with “adequate protection” of their liens on those rents.
- Suppose that a Chapter 7 trustee abandons mortgaged real estate because Debtor owes Mortgagee $150,000 but the real estate is worth only $100,000. A further question then arises: how much is the debt for foreclosure purposes? Is it $150,000 (i.e., the outstanding “debt” under state law)? Or is it only $100,000 (i.e., the amount of the mortgagee’s “secured claim” under Bankruptcy Code section 506(a))? If Debtor is an individual, Debtor’s personal liability on the mortgage debt will likely be discharged at the conclusion of the bankruptcy. As a result, if Debtor wants to retain the mortgaged real estate, Debtor might attempt to tender $100,000 cash to Mortgagee and argue that this tender satisfied the mortgage and thus extinguished the mortgage lien. In support of this argument, Debtor might point to the language of Bankruptcy Code section 506(d), which provides that a lien is void “[t]o the extent that [it] secures a claim against the debtor that is not an allowed secured claim.”
- Open Chapter
Chapter 4. Rights and Duties of the Parties Prior to Foreclosure Part 2 95 results (showing 5 best matches)
- For the text of §§ 4.6 to 4.9, see Nelson, Whitman, Burkhart & Freyermuth, Real Estate Finance Law, Sixth Edition, Practitioner Treatise, Vol. 1.
- For the text of §§ 4.30 to 4.32, 4.38 to 4.39, and 4.44 to 4.46, see Nelson, Whitman, Burkhart & Freyermuth, Real Estate Finance Law, Sixth Edition, Practitioner Treatise, Vol. 1.
- The foregoing decisions and others like them made many lenders reluctant to lend on the security of real estate that was or might be contaminated and to foreclose or otherwise acquire it. If someone was personally liable for the mortgage obligation and if state anti-deficiency or one-action legislation did not present an obstacle, mortgagees were inclined to waive their rights in their real estate security in favor of suing on the underlying obligation. On the other hand, if the mortgagors were insolvent, the underlying obligation was non-recourse, or state law barred any action on it, mortgagees were tempted to abandon any attempt to proceed against their real estate security. Mortgagees clearly were uncomfortable with this state of affairs.
- Normally, a mortgagee is not responsible to third parties, private or governmental, for the physical condition of the mortgaged real estate or injuries that occur on it. Only by becoming a mortgagee in possession or by acquiring title through foreclosure or a deed in lieu does a mortgagee assume the normal responsibilities of an owner or possessor of real estate.
- In the context of the recent real estate crisis, however, some commentators have advocated that receivership can be an effective way to dispose of real estate—and particularly, that it may in some cases provide a more effective way of disposing of mortgaged real property than the foreclosure process. Under current foreclosure law in all American jurisdictions, a foreclosure sale is a “distress sale,” i.e., a public auction sale on the courthouse steps (or at some other public place). Foreclosure by public sale is traditionally justified as a means to protect the mortgagor’s equity in the mortgaged property, particularly by comparison to the historical approach under which a defaulting borrower simply forfeited its interest in the mortgaged property (and any equity the borrower may have accumulated either through principal reduction or market appreciation). ...mortgaged commercial real property could readily market that property to potential buyers in the context of operating the...
- Open Chapter
Chapter 3. Mortgage Substitutes Part 2 90 results (showing 5 best matches)
- For the text of §§ 3.10, 3.12 to 3.16, and 3.20 to 3.25, see Nelson, Whitman, Burkhart & Freyermuth, Real Estate Finance Law, Sixth Edition, Practitioner Treatise, Vol. 1.
- See Nelson, Whitman, Burkhart & Freyermuth, Cases and Materials on Real Estate Transfer, Finance and Development 612–614 (8th ed.2009).
- See Nelson, Whitman, Burkhart & Freyermuth, Real Estate Transfer, Finance and Development 42 (8th ed.2009). Note that the time value of money must be taken into account in order to avoid unfair results in computing damages. See § 3.29 supra, note 276.
- See Nelson, Whitman, Burkhart & Freyermuth, Real Estate Transfer, Finance and Development 623–627 (8th ed.2009).
- [prior case law] * * * teaches that judgment liens entered after [vendee] acquired equitable title to the real estate conferred upon [lienholders] only such right in the real estate as [vendor] then possessed. This means that the [lienholders] acquired [vendor’s] right to receive installment payments from [vendee]. [This right] was not chargeable to [vendee] unless and until [vendee] became aware of the existence of the liens. * * * This means that, at a minimum, if [vendee] had made payments to [vendor] after she discovered the existence of the liens, she would have been liable to the [lienholders] for the same amount if [vendor] did not subsequently satisfy his debts to the [lienholders].
- Open Chapter
Chapter 12. Financing Real Estate Construction 81 results (showing 5 best matches)
- Subordination agreements are frequently used for mortgages relating to new real estate developments because they enable developers to finance subdivisions and other construction projects without investing large amounts of their own capital. The developer first persuades the land seller to accept a purchase money mortgage or trust deed for all or a large part of the purchase price. Using the land as security, the developer then arranges a loan from an institutional lender to finance the construction. A subordination agreement with the seller makes this financing scheme possible by reordering the lien priorities between the purchase money mortgage and the construction loan. Institutional lenders often require a first lien to secure their real estate loans. Without an express subordination, the law presumes that the purchase money mortgage is intended to have priority.
- In addition to covering the “hard costs,” such as materials and direct labor, the construction lender may be willing to cover certain “soft costs,” such as legal and accounting services related to the project, insurance, real estate taxes, fees for a permanent loan commitment, and possibly interest on the construction loan itself. Other negotiable points include whether the construction loan will cover any portion of the land acquisition or site development costs, such as the extension of utility lines, roads and streets, and storm and sanitary sewers. Many construction lenders take the most conservative position that the developer must cover all land acquisition, site development, and “soft” costs through cash outlays or other financing separate from and junior to the construction loan. In some cases, the lender is legally obligated to limit its loan to “hard” construction costs. ...is complete or of the project’s total cost, including holding costs, such as loan interest and real...
- The basic idea of a mechanic’s lien is that a person whose work or materials improve real estatethat real estate. Beginning with the original Maryland statute, “[t]hese laws grew, and their validity became established, as the courts held that the building business did not have the protection inherent in the widespread distribution of credit risk common to other businesses, and therefore needed this broader and special protection. Contractors, subcontractors, materialmen, and other building groups were frequently obliged to extend credit in larger amounts, and for longer time, than other businesses. Such parties might have their entire capital, or a substantial part of it, tied up in one or two, or ten or twenty, projects under construction.”
- Construction lending is far more exacting and risky than lending on completed structures, because the real estate’s value as security depends entirely on future events—completion of the construction as agreed by the parties (construction risk) and the ability to lease or sell the completed structure (market risk). If the construction is not completed or is completed late or defectively or if the project’s value on completion is less than anticipated, the construction lender may find itself in the unhappy position of being inadequately secured. This situation is even more precarious for junior lienors, such as the land vendor who financed the present owner’s purchase and the workers and materials suppliers that have a mechanic’s lien. Their junior priority position increases the risk that the project will not be worth enough to cover their debts after paying the construction lender.
- For many years, institutional lenders were subject to rather rigid limits on loan-to-value ratios, amortization, and other features of real estate loans, but the restrictions have been substantially relaxed. The most significant limitation today is on loan-to-value ratios, but even that limitation is not completely mandatory. The “Interagency Guidelines for Real Estate Lending Policies,” which was jointly promulgated by the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision, ...-value ratios of 85% for one- to four-family homes and 80% for all other property types. State-chartered lenders are subject to state law, which varies considerably from state to state. A state-charted lender that is in the Federal Reserve System or is FDIC-insured also is subject to the Interagency Guidelines. Financial institutions also have internal credit policies that may be more restrictive and that vary depending on...
- Open Chapter
Chapter 1. An Introduction to the Law of Mortgages 27 results (showing 5 best matches)
- A purchase money mortgage arises where the mortgagor’s acquisition of the mortgaged real estate is financed by the mortgagee-lender. Often a seller of real estate will take back a purchase money mortgage for part of the purchase price. More commonly, however, a third party lending institution will take a mortgage covering real estate acquired by the mortgagor with funds provided by the lending institution. In many states this is also treated as a purchase-money mortgage. Such transactions may be as simple as the purchase of a single family residence by a borrower-mortgagor or as complex and sophisticated as the construction and long term financing obtained by a developer to build a shopping center or an apartment building. In the non-purchase money situation the mortgagee-lender does not provide an acquisition loan but rather lends money on real estate already owned by the borrower-mortgagor. A corporation, for example, may often mortgage previously owned real estate to obtain...
- The material in this treatise focuses upon, in a variety of simple and sophisticated factual settings, the use of real estate as security for obligations. In this connection, there is a substantial emphasis on the real estate mortgage and its functional equivalents. As the term is used in its modern context, a real estate mortgage involves a transfer by a debtor-mortgagor to a creditor-mortgagee of a real estate interest, to be held as security for the performance of an obligation, normally the payment of a debt evidenced by the mortgagor’s promissory note.
- Because the level-monthly-payment fully-amortized loan is so common in modern real estate financing, it is important to understand its characteristics. The monthly payment is set so that only a portion (though a large portion in the early years) is needed to cover the interest which has accrued since the last preceding payment; the remainder of each payment is applied to reduce the outstanding principal. Thus, the interest which accrues in each month will be less than the interest for the preceding month, since interest is being computed on a continually declining principal amount.
- Today most mortgages are amortized or repaid over a substantial number of years. Until the 1930’s most mortgages, however, were of the “balloon-note” type. Typically these were short-term mortgages for three or five years, and borrowers made only interest payments until the loan came due. Then if the borrower had not saved enough to pay the entire principal, he would expect the note to be renewed or would attempt to refinance it with another lender. However, during the depression period of the 1930’s, many of these lenders were forced to demand full payment and to foreclose on properties when mortgagors could not pay. With the encouragement of the Federal Housing Administration and federal housing legislation, lenders during this period developed the amortized mortgage loan system under which mortgagors were permitted to repay loans over many years by making monthly principal and interest payments. Such loans are common today in both the housing and commercial real estate markets....
- An understanding of the modern real estate mortgage requires, at least, a limited consideration of its historical antecedents. Although the mortgage has its roots in both Roman law and in early Anglo-Saxon England, the most significant developments for our purposes are the English common law mortgage and the effects on that mortgage of the subsequent intervention of English equity courts. These developments not only substantially influenced the substance of American mortgage law, but they are responsible for much of its terminology as well.
- Open Chapter
Preface 7 results (showing 5 best matches)
- Further, while the law governing foreclosure of personal property security enjoys nationwide consistency under UCC Article 9, the law of real estate finance remains frustratingly nonuniform. While state courts and legislatures have begun experimenting with the implementation of mediation and loss mitigation programs designed to facilitate mortgage modification for distressed borrowers, these efforts remain haphazard. The crisis has prompted the Uniform Law Commission to renew its efforts to promote a uniform law governing foreclosure, but the outlook for its success remains quite unclear.
- We are highly pleased to welcome two new co-authors in this Sixth Edition: Professors Ann Burkhart of the University of Minnesota and Wilson Freyermuth of the University of Missouri. Both are long-time colleagues and friends of Nelson and Whitman, the authors on the past four editions. Ann and Wilson are both outstanding scholars who have published widely in the areas of property and real estate finance. They are among the nation’s top academics in their fields. Moreover, they are also the co-editors with Nelson and Whitman on the Eighth Edition of
- Indeed, the past seven years produced an upheaval in the world of real estate finance not experienced since the Depression era. Residential and commercial real estate values plummeted. Default and foreclosure rates skyrocketed, particularly in the residential sector. Fannie Mae and Freddie Mac became insolvent, received an enormous public bailout, and were placed in federal conservatorship—yet are now once again earning enormous profits and have largely repaid the public bailout. Enormous sums have been spent to implement mortgage modification programs designed to keep distressed borrowers in their homes, yet substantial doubt remains about the overall effectiveness of these efforts.
- More significantly, the foreclosure crisis produced by this upheaval has revealed a real estate finance system that is significantly broken, both for borrowers and lenders. On the one hand, the crisis has exposed that rampant securitization produced appallingly inadequate recordkeeping and servicing practices. Original promissory notes that ostensibly were to end up in securitization pools were frequently lost, destroyed, or improperly negotiated, raising unnecessary legal doubt regarding the ability to enforce the underlying obligation of the borrowers. The MERS system—which conceptually might have functioned to streamline the securitization process by avoiding the need for a recorded chain of mortgage assignments—became a lightning rod (quite justifiably so, in some respects) to the extent that it permitted MERS members to institute foreclosures in the name of MERS rather than in the name of the actual beneficial owner of the mortgage note, contributing to a perceived lack of...
- We remain pleased that the Restatement (Third) of Property: Mortgages, promulgated by the American Law Institute in 1997, has continued to enjoy considerable and increasing success in the courts. Readers will continue to find enhanced consideration of the Restatement and its commentary throughout the Sixth Edition.
- Open Chapter
Index 30 results (showing 5 best matches)
- EDITORIAL NOTE: A number of entries in this shared table relate to material appearing only in the two-volume edition of this work. In these instances, see Nelson, Whitman, Burkhart & Freyermuth, Real Estate Finance Law, Practitioner Treatise Series, Sixth Edition.
- Single asset real estate reorganizations, 8.12, 8.19.
- Prior real estate mortgages, 9.7.
- Subsequent real estate mortgages, 9.7.
- After transfer of mortgaged real estate, 5.18–5.19.
- Open Chapter
Chapter 8. Statutory Impacts on Foreclosure Part 3 112 results (showing 5 best matches)
- Recall that the bankruptcy estate includes all interests that the debtor had in any property at the time of the bankruptcy petition, including redemption rights. See § 8.12 supra, note 338. Suppose that Bank had foreclosed on Debtor’s real estate and completed its foreclosure sale prior to the Debtor’s Chapter 7 petition. If the real estate sold for less than its value, it may be advantageous for the trustee to exercise the debtor’s state statutory redemption right (if the state’s law permits statutory redemption), because these statutes typically permit the mortgagor to redeem by paying an amount equal to the foreclosure sale price plus certain statutory amounts. See § 8.4 supra. If the trustee can redeem the real estate for a price less than its value, the trustee can then liquidate the real estate and hopefully produce additional proceeds for distribution to creditors.
- 11 U.S.C.A. § 101(51B). The term has been interpreted to include raw land even though it generated no income, In re Oceanside Mission Associates, 192 B.R. 232, 28 Bankr. Ct. Dec. (CRR) 703, 35 Collier Bankr. Cas. 2d (MB) 336, Bankr. L. Rep. (CCH) ¶ 76897 (Bankr. S.D. Cal. 1996). Even where the business activities conducted by the debtor are closely related to the debtor’s ownership of the land, courts have sometimes concluded that the debtor’s business activities were sufficiently “substantial” to prevent characterization of the land as single asset real estate. See, e.g., In re Scotia Pacific Co., LLC, 508 F.3d 214, 49 Bankr. Ct. Dec. (CRR) 12, 58 Collier Bankr. Cas. 2d (MB) 1508, Bankr. L. Rep. (CCH) ¶ 81053 (5th Cir. 2007) (debtor engaged in timber harvesting conducted substantial business other than operating real estate and thus was not single asset real estate debtor); In re Kkemko, Inc., 181 B.R. 47, 27 Bankr. Ct. Dec. (CRR) 134, 33 Collier Bankr. Cas. 2d (MB) 757, Bankr. L....
- , see Nelson and Whitman, Real Estate Finance Law § 8.17 (3d ed.).
- Single asset real estate debtors will have a few other creditors, typically trade creditors (such as providers of repair or janitorial services); however, the unsecured claim of an undersecured mortgagee on single asset real estate inevitably dwarfs the claims of all other unsecured creditors combined.
- Schill, The Impact of the Capital Markets on Real Estate Law and Practice, 32 J. Marshall L. Rev. 269, 286–287 (1999).
- Open Chapter
Table of Contents 5 results
Chapter 12. Financing Real Estate Construction Part 3 56 results (showing 5 best matches)
- Hyde, The Real Estate Lease as a Credit Instrument, 20 Bus. Law. 359, 389 (1965).
- Under this agreement, the lessor was to subordinate her fee estate to the lessee’s construction loan. Although commonly called a subordination agreement, this “subordination” is the lessor’s agreement to join in the lessee’s mortgage, thereby subjecting the fee title to the mortgage. See McKee v. First Nat. Bank of Brighton, 220 Ill. App. 3d 976, 163 Ill. Dec. 389, 581 N.E.2d 340 (4th Dist. 1991); Halper, Planning and Construction Clauses in a Subordinated Ground Lease, 17 Real Est. L.J. 48 (1988); Halper, Mortgageability of Unsubordinated Ground Leases, 16 Real Est. L.J. 60 (Winter 1987); Report of Committee on Leases, Ground Leases and Their Financing, 4 Real Prop. Prob. & Tr. J. 437 (1969). The misuse of the term “subordination” in this content often irritates the courts. See Pearlman v. National Bank of New York City, 600 So. 2d 5 (Fla. 4th DCA 1992); Travelers Ins. Co. v. Holiday Village Shopping Center Ltd. Partnership, 280 Mont. 217, 931 P.2d 1292 (1996).
- By analogy, see Restatement Third, Property (Mortgages) § 7.7 (1997) (interest to which mortgage is subordinated must be described with “reasonably specificity”). See Lawrence v. Maris, 2003 WL 21675520 (Cal. App. 4th Dist. 2003), unpublished/noncitable, in which the subordinated lessor on a long-term ground lease argued that the lessee’s mortgage financing on the property violated the standard because it was not restricted to use for improvements to the real estate. The court agreed that
- A seller successfully sued his lawyer for failing to draft a subordination agreement to require that all loan proceeds be used for permanent improvements on the property. Starr v. Mooslin, 14 Cal. App. 3d 988, 92 Cal. Rptr. 583 (2d Dist. 1971). See also Roskamp Manley Associates, Inc. v. Davin Development & Investment Corp., 184 Cal. App. 3d 513, 229 Cal. Rptr. 186 (2d Dist. 1986) (specifying elements of agreement that would help protect subordinating land vendor); National Mortg. Corp. v. American Title Ins. Co., 299 N.C. 369, 261 S.E.2d 844 (1980) (construction lender’s title insurer not liable for loss of priority when funds were diverted, which restored subordinating party’s original priority according to terms of agreement); Long & Foster Real Estate, Inc. v. Clay, 231 Va. 170, 343 S.E.2d 297 (1986) (real estate broker breached fiduciary duty to vendor by failing to adequately explain significance of subordination clause).
- Jeminson v. Montgomery Real Estate & Co., 396 Mich. 106, 240 N.W.2d 205 (1976). The facts are reported at 210 N.W.2d 10 (Mich.Ct.App.1973).
- Open Chapter
Chapter 5. Transfer by the Mortgagor and the Mortgagee Part 5 78 results (showing 5 best matches)
- The details of differences between the two versions vary, as do the actual enactments of the states. Space does not permit an elaborate discussion of these variations. See Comment: The Uniform Consumer Credit Code and Real Estate Financing—A Square Peg in a Round Hole, 28 U. Kan. L. Rev. 601, 615–16 (1980).
- Under U.C.C. § 9–203(g), a transfer of the right to payment (i.e., ownership) of the note automatically transfers the right to any accompanying security interest in real or personal property, including a real estate mortgage.
- First Nat. Bank of Cape Cod v. North Adams Hoosac Sav. Bank, 7 Mass. App. Ct. 790, 391 N.E.2d 689, 27 U.C.C. Rep. Serv. 452 (1979) (accompanying documents referred to claim of a prior assignee); United States Finance Co. v. Jones, 285 Ala. 105, 229 So. 2d 495, 7 U.C.C. Rep. Serv. 204 (1969) (notice of completion dated simultaneously with promissory note, suggesting that work by assignor on maker’s house would not actually be completed); Beal Bank v. Siems, 670 N.W.2d 119, 52 U.C.C. Rep. Serv. 2d 11 (Iowa 2003) (contents of loan file delivered to note purchaser revealed existence of a defense by maker); HIMC Inv. Co. v. Siciliano, 103 N.J. Super. 27, 246 A.2d 502, 5 U.C.C. Rep. Serv. 846 (Law Div. 1968) (accompanying documents disclosed payment of commission in violation of N.J. Secondary Mortgage Loan Act). Contra, see Barbour v. Handlos Real Estate and Bldg. Corp., 152 Mich. App. 174, 393 N.W.2d 581, 2 U.C.C. Rep. Serv. 2d 963 (1986) (assignees held to have no notice of contents...
- See First Federal Sav. and Loan Ass’n v. Twin City Sav. Bank, FSB, 868 F.2d 725 (5th Cir. 1989) (participant sued for rescission or damages on the basis of lead bank’s fraud in withholding certain construction and cash flow projections on the real estate project; held, participant is entitled to relief under Louisiana law despite its own negligence in purchasing its share).
- See Essay, The Aftermath of Penn Square Bank: Protecting Loan Participants from Setoffs, 18 Tulsa L.J. 261, 274 (1982), for a participation agreement form; Arnold, Modern Real Estate and Mortgage Forms 4 to 29 (1970), for a participation agreement intended for use on a construction loan; Tockarshewsky, Loan Participations Are Meaningful Commitments, 8 No. 3 Real Est. Rev. 61 (Fall 1978).
- Open Chapter
Table of Cases Part 2 43 results (showing 5 best matches)
- ING Real Estate Finance (USA) LLC v. Park Ave. Hotel Acquisition LLC ………… 17
- First Federal Sav. & Loan Ass’n of Salt Lake City v. Gump & Ayers Real Estate, Inc. ………… 402
- Fleet Real Estate Funding Corp. v. Frampton ………… 521, 523
- Inland Real Estate Corp. v. Oak Park Trust and Sav. Bank ………… 403, 429
- Jeminson v. Montgomery Real Estate & Co. ………… 410, 1148
- Open Chapter
Chapter 5. Transfer by the Mortgagor and the Mortgagee Part 2 82 results (showing 5 best matches)
- Both consumer loans and consumer credit sales (to adopt the UCCC’s terminology) are covered by the FTC rule. If third-party lender financing is the mode employed (as the FTC rule terms it, a “purchase money loan”), the loan must have been made in connection with a sale of goods or services, and a type of “close-connectedness” criterion must be satisfied, but it is much simpler and looser than the UCCC’s. The lender is Another interesting difference between the UCCC and the FTC rule is that the latter does not apply to the financing of sales of interests in real estate, irrespective of the amount or interest rate. It does, however, apply to sales of goods or services even if a mortgage on real estate is taken to secure payment of the purchase price.
- Article 9 does not usually affect real estate mortgages as such; it expressly provides that it does not apply “to the creation or transfer of an interest in or lien on real estate * * *.” However, when the real estate lien and its associated obligation are themselves being employed as security for a separate debt, the documents (the note and mortgage) are personal property rather than real estate, and their pledge is covered by Article 9. The language quoted above might be read to negate this argument, since a pledge of a note and mortgage obviously involves, in part, a “transfer of a … lien on real estate.” However, this reading is contradicted by the Code’s statement that application of Article 9 is “not affected by the fact that the obligation [being pledged] is itself secured by a transaction or interest to which this Article does not apply.”
- Creditor 1 has a further reason for getting possession of the note rather than merely filing a financing statement. Only if Creditor 1 has possession can Creditor 1 become a holder in due course under UCC Article 3. If the note is negotiable in form (as some but not all real estate loan notes are), becoming a holder in due course can
- Incidentally, while the foregoing discussion is couched in terms of a mortgage loan as the underlying collateral, the same principles apply if the collateral is a vendor’s interest in a real estate installment contract instead. In the minds of many real estate lawyers, the third reason to use a transfer statement discussed in the preceding paragraph takes on even greater significance when an installment contract rather than a mortgage is the underlying real estate security document, simply because of the instinctive (although largely misplaced) view that the vendor under an installment contract still has the ...contract purchaser when the final payment on the contract is made has little or no credibility unless it is executed and delivered by someone who has a record chain of title to the land (analogous to a chain of assignments in mortgage law). Again, it is the recording of the combination of the security agreement and affidavit between the pledgor and pledgee, and the... ...real...
- , in which a third party asserts a prior claim to the mortgaged real estate, simply lie outside the scope of the UCC and in the province of court-made law, Not at all. That principle applies only to the rights of the note-maker/mortgagor, and not to rights to the real estate asserted by third parties.
- Open Chapter
Summary of Contents 2 results
Chapter 11. Government Intervention in the Mortgage Market 95 results (showing 5 best matches)
- Unlike savings associations and banks, life insurance companies and pension funds are not depository institutions. Instead, their assets come from premium payments on life policies and contributions to various retirement and annuity programs. These comprise a relatively stable and predictable source of funds as compared with savings deposits. Hence, these companies have a preference for long-term large-dollar investments, such as mortgage loans on commercial real estate. They are regulated only at the state level by insurance commissions or departments, and the legal constraints on their lending are not very restrictive. Moreover, in most jurisdictions they are permitted to invest in real estate financings other than standard mortgage loans. These include sale-leasebacks, sale-salebacks, leasehold mortgages, and other innovative financing methods. These investments are often called “basket” loans since the applicable law or regulation usually provides for a maximum percentage of...
- Real estate investment trusts.
- Under the Supremacy Clause of the United States Constitution, federal law that is validly adopted and within the constitutional power of the federal government is the supreme law of the land and supersedes any conflicting state law. This preemption concept has several applications in mortgage law. The most clearcut is the situation in which a congressional enactment or a valid regulation of a federal agency speaks directly to the point. Numerous illustrations may be cited. The Home Mortgage Disclosure Act requires institutional lenders to assemble and release to the public certain data on the amounts and locations of their residential loans. mandates that certain disclosures concerning interest and finance charges be made to borrowers, and the Real Estate Settlement Procedures Act (RESPA)
- Beginning in 1980 Congress enacted three statutes that expressly preempt state law in a particularly direct and forceful manner. Each was a product of the extremely high interest rates that prevailed in the early 1980s, and of the resultant financial stress with which mortgage lenders were beset. The first, effective March 31, 1980, preempted state usury laws for all “federally-related” loans secured by first liens on residential real estate. restrictions on discount points and other finance charges, were covered. Second, Congress passed Section 341 of the Garn-St. Germain Depository Institutions Act of 1982. Effective October 15, 1982, it preempted (with certain exceptions) state law that restricted exercise by lenders of due-on-sale clauses in mortgage instruments.
- Because this is a nation of homeowners, it is not surprising that more than three quarters (75.7%) of this mortgage debt is secured by 1-to-4 family homes. (Loans on buildings containing four or fewer residential units are conventionally lumped together and termed “home loans.”) The remainder of this mortgage debt is secured by commercial properties (16.7%), multifamily apartment buildings (6.5%), and farm properties (1.1%). Mortgage financing is particularly important in the development of new real estate projects, and it is quite rare for one to be constructed without mortgage debt.
- Open Chapter
Chapter 4. Rights and Duties of the Parties Prior to Foreclosure 76 results (showing 5 best matches)
- The Restatement defines the term “rents, issues and profits” broadly to include “the proceeds payable by a lessee, licensee, or other person for the right to possess, use or occupy the real property of another.” Thus, for example, under the Restatement approach, hotel room revenue qualifies as rents from real estate. This approach is sensible because like the lease revenues received by an owner-mortgagor of an office building or a shopping center, the hotel room revenues collected by an owner-mortgagor of a hotel represent income derived primarily from granting others the right to occupy and use real estate. Likewise, the Uniform Assignment of Rents Act defines “rents” to include sums payable for the right to possess or occupy the real property of another person, even if the occupant does not technically constitute a “tenant” under real property law.
- As we have seen, mortgagees are understandably insistent that mortgagors carry casualty insurance on the mortgaged real estate and that insurance premiums be paid promptly. Insurance provides protection against the partial or complete destruction of the mortgage security. Mortgagees also have special concern as to real estate taxes and assessments because, as Professor Durfee once aptly pointed out, “in most tax systems * * * the burden of the ordinary tax on land and the burden of special assessments for local improvements rests on both mortgagor and mortgagee in the sense that unless these charges are satisfied by someone before the axe falls the interest of both parties will be rubbed out. The state goes after the land and its claim overrides In other words, a “first” mortgage on real estate will be eliminated by a sale under a subsequently arising real estate tax lien. Hence, virtually all mortgages contain clauses specifically imposing the duty to pay taxes on the mortgagor...
- To the extent that any state law today still fails to require that both notice and an opportunity to be heard be afforded to the mortgagee in a condemnation proceeding, it must surely violate procedural due process requirements of notice and hearing under federal and state constitutions. Indeed, in a decision holding that notice by publication and posting provided inadequate notice to a mortgagee of real estate being foreclosed for failure to pay property taxes, the United States Supreme Court stated: “Notice by mail or other means as certain to ensure actual notice is a minimum constitutional precondition to a proceeding which will adversely affect the liberty or property interests of If such notice is constitutionally required in a real estate tax foreclosure, it must surely be necessary in condemnation as well. After all, whether one characterizes the mortgagee’s interest as an estate in land or as merely a lien, it not only is property, but an often economically substantial...
- Mortgagees have argued that an “absolute” assignment of rents strengthens their position regarding rents, particularly in bankruptcy. Upon the filing of a bankruptcy petition, all of the debtor’s property becomes property of the bankruptcy estate. The debtor generally may use property of the estate in the course of the bankruptcy case, subject to an obligation to provide adequate protection to a creditor holding a lien upon that property. Moreover, a creditor holding a lien on property of the estate is subject to the automatic stay and cannot enforce its lien during the bankruptcy without obtaining relief from the stay. Thus, a mortgagor of income-producing real property stands to gain substantial leverage if the post-bankruptcy rents constitute property of the estate. By contrast, the assignee of rents would prefer that the law characterize rents accruing during bankruptcy as property that is part of the estate; in that
- The Restatement concurs, broadly defining waste as including acts by which the mortgagor (1) physically changes the real estate, whether negligently or intentionally, in a manner that reduces its value; (2) fails to maintain and repair the real estate in a reasonable manner, except for repair of casualty damage or acts of third parties not the fault of the mortgagor; (3) fails to pay before delinquency property taxes or governmental assessments secured by a lien having priority over the mortgage; or (4) materially fails to comply with covenants in the mortgage respecting the physical care, maintenance, construction, demolition, or insurance against casualty of the real estate or improvements on it.
- Open Chapter
Chapter 2. The Necessity and Nature of the Obligation 42 results (showing 5 best matches)
- Indeed, with such an obligation the whole system of mortgage enforcement would break down. There are several reasons for this. First, in the event of a foreclosure sale, the purchaser would presumably bid what the real estate is worth. However, unless the mortgage debt is reducible to a money amount, it would be impossible to determine a deficiency or to allocate surplus among junior lienors, if any, or to the mortgagor. Second, creditors of the mortgagor would face the same uncertainty in attempting to enforce a judgment against the mortgaged real estate. Third, mortgagees would have difficulty in assigning the mortgagee’s interest, since prospective investors would be unable to determine its value with any accuracy. Finally, mortgagors would find it extremely difficult to obtain second mortgage financing. Because of the inability to ascertain the amount of the prior lien, lenders would have substantial difficulty in determining the value of the mortgagor’s equity for loan...
- Since most real estate development entities are “single-asset” borrowers that own nothing except the particular real estate project, the personal liability of the borrower entity has little meaning; it will be unable to respond with money if its sole asset, the real estate project, is in financial difficulty or has already been foreclosed. Hence, to be useful to the lender, the nonrecourse carve-outs must be guaranteed by some or all of the individual principals of the entity.
- N.Y. Real Prop. Law § 249 provides that “A mortgage of real property does not imply a covenant for the payment of the sum intended to be secured; and where such covenant is not expressed in the mortgage, or a bond or other separate instrument to secure such payment has not been given, the remedies of the mortgagee are confined to the property mentioned in the mortgage.” Cal. Civ. Code § 2928 is similar.
- See Stein, The Scope of the Borrower’s Liability in a Nonrecourse Real Estate Loan, 55 Wash. & Lee L. Rev. 1207 (1998); Stein, Lenders Model State-of-the-Art Nonrecourse Clause, 43 Prac. Law., Oct. 1997, at 31; In re Allen-Main Associates Ltd. Partnership, 223 B.R. 59, 32 Bankr. Ct. Dec. (CRR) 1192, Bankr. L. Rep. (CCH) ¶ 77750 (B.A.P. 2d Cir. 1998).
- There are also cases in which the mortgagee has been guilty of fraud or other breach of duty, but has nonetheless disbursed the proceeds of the loan to the mortgagor. While the wrong committed by the mortgagee might give the mortgagor a defense on the note (and hence the mortgage), such a mortgagor would surely have an equitable duty to make restitution of the loan funds received. The mortgagee may have an equitable lien on the real estate, with a priority equivalent to that of the original mortgage, to assist in collecting those funds. See Union Trust Co. v. Biggs, 153 Md. 50, 137 A. 509 (1927).
- Open Chapter
Chapter 7. Foreclosure Part 3 85 results (showing 5 best matches)
- Under the Restatement, the “surplus stands in the place of the foreclosed real estate, and the liens and interests that previously attached to the real estate now attach to the surplus.” Restatement Third, Property: Mortgages § 7.4 comment a.
- Suppose that the title is not defective, but the physical quality of the real estate is. To what extent may a judicial foreclosure be set aside when, after the foreclosure sale, the purchaser discovers significant physical defects in the real estate? See Horicon State Bank v. Kant Lumber Co., Inc., 165 Wis. 2d 543, 478 N.W.2d 26 (Ct. App. 1991) (mortgagee that purchased land at foreclosure sale not permitted to invalidate sale on grounds of environmental contamination when a reasonable inspection before sale would have disclosed the problem).
- See, e.g., Cox v. Townsend, 90 Mich. App. 12, 282 N.W.2d 223 (1979); Foreclosure sale of mortgaged real estate as a whole or in parcels, 61 A.L.R.2d 505, 574 § 17.
- A few states require mailed (registered or certified) notice to the “mortgagor,” the record “owner,” and “any person having a lien” on the mortgaged real estate. See N.H. Rev. Stat. Ann. § 479:25. Courts broadly interpret the term “owner” to include recorded lessees. See Snyder v. New Hampshire Sav. Bank, 134 N.H. 32, 592 A.2d 506 (1991).
- See, e.g., Mo. Ann. Stat. § 443.325. Some states require mailed notice to all parties having a record interest in the real estate together and to any other person who has previously recorded a request for it. See, e.g., Ariz. Rev. Stat. § 33–809; Cal. Civ. Code Ann. § 2924(b).
- Open Chapter
Chapter 5. Transfer by the Mortgagor and the Mortgagee 90 results (showing 5 best matches)
- For a variety of reasons these concealment strategies often fail. Some mortgagees closely monitor the public records for evidence of new real estate recordings affecting their mortgaged properties. Ownership changes may also become apparent from annual real estate tax statements that the mortgagee receives in its capacity as an escrow agent for real estate taxes and insurance, or when a new casualty insurance policy is issued and the mortgagee’s copy reveals the new owner. Moreover, mortgagees may keep abreast of transfers through a program of regular inspection of the real estate on which they hold mortgages.
- A second argument emphasizes that the enforcement of due-on-sale clauses in a rising interest market tends to reduce the discrimination that otherwise exists in favor of those buyers fortunate enough to find a low-interest loan to assume, as against those who must obtain new mortgage financing. Indeed, because existing low-interest loans have been paid down to some extent, and because of inflation in the value of real estate, the buyers able to assume an existing loan generally will be those who have a significant amount of cash, whereas those who are not so fortunate must obtain new financing at higher market interest rates. Thus, nonenforcement of due-on-sale clauses may afford buyers of greater wealth an inordinate interest rate advantage over those who are less fortunate.
- This is perhaps the most plausible position; after all, the clause merely enables the lender to say to the borrower, “You are welcome to sell your real estate whenever and however you wish, but you cannot use the financing we gave you to facilitate that sale.” While many courts probably viewed the clause as an indirect restraint on alienation, all recognized that there were circumstances in which enforcement of the clause was reasonable and thus permissible.
- One significant question is whether a sale of mortgaged real estate by installment land contract permits acceleration under the mortgage’s due-on-sale clause. At one time many real estate brokers seem to have assumed (erroneously) that it did not, and they often advised their clients to employ installment contracts to avoid acceleration of the underlying mortgage. The answer depends on the precise wording of the clause in question,
- Occasionally a mortgage contains not merely a due-on-sale clause but a literal prohibition on transfer by the mortgagor without the mortgagee’s consent. The lender might justify this language, in a loan on a hotel or a shopping center for example, by pointing out that it relied heavily on the original mortgagor’s management skill and expertise and was strongly averse to permitting substitution of a different owner of the real estate. If this sort of clause is combined with a prohibition on prepayment, and if the lender refuses to consent to both transfer and prepayment, the borrower is effectively “locked in” to the real estate. It seems quite likely that a court faced with this combination would find that it amounted to an invalid restraint on alienation, and would order the lender to waive one of the clauses, thus permitting either payoff of the mortgage or transfer of the real estate. However, no case has been found that directly confronts this issue.
- Open Chapter
Chapter 6. Discharge of the Mortgage Part 2 71 results (showing 5 best matches)
- See Willis V. Carpenter & Blair E. Daniels, Short Sale Addendum, Colo. Real Est.Prac. Form 8–19 (2012); Dunaway, Babbitt, Gerth, and McGrane, Law of Distressed Real Estate § 3B:8; Miller, Short Sales Overview with an Emphasis on Broker Issues, 26 No. 3 Prac. Real Est. Law. 9 (2010); Gerald J. Robinson, Provisions for Short Sale in Contract for Sale of Residence, Real Est. Forms; Vacco, supra note 398.
- Dunaway, Babbitt, Gerth, and McGrane, Law of Distressed Real Estate § 3B:8.
- Brumfield, The “Short Cut” to the Stabilization of the Underwater Housing Market: How the New FHFA Short Sale Guidelines Promote Economic Efficiency, 41 Real Est. L.J. 456 (2013); Real Estate Economy Watch.com, Short Sale and Foreclosure Discounts Converge, available at http://www.realestateeconomywatch.com/2012/05/short-sale-and-foreclosure-discounts-converge/.
- U.C.C.C. § 2.509 (1974); the UCCC originally was promulgated in 1968 and, after intervening drafts, the 1974 UCCC was promulgated. The UCCC, in one of the foregoing versions, is in effect with a variety of modifications in Oklahoma, Utah, Colorado, Idaho, Indiana, Wyoming, Kansas, Iowa, Maine, South Carolina and Wisconsin. However, several of these states have modified the details of the exclusion for real estate loans; see, e.g., Colo. Rev. Stat. Ann. § 5–3–105 (first mortgages to finance acquisition of a dwelling are excluded); Ind. Code § 24–4.5–3–105 (all mortgage transactions excluded); Okl. Stat. Ann. tit.14A, § 3–105 (mortgage loans excluded if interest does not exceed 13%); Utah Code Ann. § 70C–1–202(2) (first lien mortgage loans excluded); Wyo. Stat. Ann. § 40–14–305 (mortgage loans excluded if interest rate does not exceed 18%).
- Hetland, California Real Estate Secured Transactions 197 (1970).
- Open Chapter
Chapter 8. Statutory Impacts on Foreclosure Part 4 59 results (showing 5 best matches)
- The term means “real property constituting a single property or project, other than residential real property with fewer than 4 residential units, which generates substantially all of the gross income of a debtor who is not a family farmer and on which no substantial business is being conducted by a debtor other than the business of operating the real property and activities incidental thereto.” 11 U.S.C.A. § 101(51B). The term has been interpreted to include raw land even though it generated no income, In re Oceanside Mission Associates, 192 B.R. 232, 28 Bankr. Ct. Dec. (CRR) 703, 35 Collier Bankr. Cas. 2d (MB) 336, Bankr. L. Rep. (CCH) ¶ 76897 (Bankr. S.D. Cal. 1996). Even where the business activities conducted by the debtor are closely related to the debtor’s ownership of the land, courts have sometimes concluded that the debtor’s business activities were sufficiently “substantial” to prevent characterization of the land as single asset real estate. See, e.g., In re Scotia...
- For example, in In re Highlands Group of Brunswick, LLC, 57 Bankr. Ct. Dec. (CRR) 52, 2012 WL 5385633 (Bankr. E.D. N.C. 2012), a single-asset debtor filed a chapter 11 with the ultimate goal of surrendering the property. The court held that even in the SARE context, this was not an illegitimate use of the bankruptcy process, noting that the fact that guarantors might benefit from the process if they could obtain favorable valuation of the collateral did not by itself establish bad faith. Likewise, in In re Crown Village Farm, LLC, 415 B.R. 86 (Bankr. D. Del. 2009), the court held that a Chapter 11 SARE debtor filed in good faith, even though the debtor proposed to liquidate the real estate, because the debtor’s strategy was to maximize the estate’s value and the then-current state of the real estate market meant that speed in disposing of the property was undesirable.
- See, e.g., 7 Collier on Bankruptcy 1122.03[3][c], at 1122–15 (16th Cir.); In re Commercial Western Finance Corp., 761 F.2d 1329, 13 Bankr. Ct. Dec. (CRR) 352, 12 Collier Bankr. Cas. 2d (MB) 1177, Bankr. L. Rep. (CCH) ¶ 70575 (9th Cir. 1985) (creditors with claims against different properties generally entitled to have claims classified separately). If a mortgage loan involves a loan participation, see § 5.35 supra, then the plan would classify the loan participants in the same class. See, e.g., In re Keck, Mahin & Cate, 241 B.R. 583, 35 Bankr. Ct. Dec. (CRR) 85, 43 Collier Bankr. Cas. 2d (MB) 482 (Bankr. N.D. Ill. 1999) (classifying together claims of secured creditors with same pro rata right to payment from the collateral). See also In re River Canyon Real Estate Investments, LLC, 495 B.R. 526, 58 Bankr. Ct. Dec. (CRR) 99 (Bankr. D. Colo. 2013) (two special water districts with liens of equal priority on same collateral placed in same class; section 1111(b) election by only one...
- In re LaFata, 483 F.3d 13, 57 Collier Bankr. Cas. 2d (MB) 1430, Bankr. L. Rep. (CCH) ¶ 80906 (1st Cir. 2007) (modification permitted where debtor’s residence was primarily located on an adjacent lot and merely encroached on mortgaged real estate); In re Potts, 421 B.R. 518, Bankr. L. Rep. (CCH) ¶ 81666 (B.A.P. 8th Cir. 2010) (modification permitted where mortgage covered both home and separate parcel used for grazing and growing crops); In re Bulson, 327 B.R. 830, 54 Collier Bankr. Cas. 2d (MB) 819 (Bankr. W.D. Mich. 2005) (modification allowed where mortgaged real estate contained both a structure occupied by debtors as principal residence and a separate structure occupied by a mother of one of the debtors); In re Bookout, 231 B.R. 306, 34 Bankr. Ct. Dec. (CRR) 71, 41 Collier Bankr. Cas. 2d (MB) 853 (Bankr. E.D. Ark. 1999) (judicial lien on additional 60 acres constitutes additional security); In re Dinsmore, 141 B.R. 499, 27 Collier Bankr. Cas. 2d (MB) 785, Bankr. L. Rep. (CCH) ¶...
- See, e.g., In re Jamaica House, Inc., 31 B.R. 192 (Bankr. D. Vt. 1983) (stay continuation conditioned upon debtor’s payment of real estate taxes and insurance premiums).
- Open Chapter
Chapter 7. Foreclosure Part 2 86 results (showing 5 best matches)
- Bureau of Consumer Financial Protection, Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act (Regulation X), Final Rule; Official Interpretations, 78 Fed. Reg. 10696, 10790 (Feb. 14, 2013); as amended by Amendments to the 2013 Rules Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z), Final Rule; Official Interpretations, 78 Fed. Reg. 44686 (July 24, 2013); as further amended by Amendments to the 2013 Mortgage Rules Under the Equal Credit Opportunity Act (Regulation B), Real Estate Settlement Procedures Act (Regulation X), and the Truth in Lending Act (Regulation Z), Final Rule, 78 Fed. Reg. 60382 (Oct. 1, 2013); as further amended by Amendments to the 2013 Mortgage Rules Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z), Interim Final Rule, 78 Fed. Reg. 62993 (Oct. 23, 2013).
- Bureau of Consumer Financial Protection, Mortgage Servicing Rules Under Real Estate Settlement Procedures Act (Regulation X), Final Rule; Official Interpretations, 78 Fed.Reg. 10696, 10790 (Feb. 14, 2013); as amended by Amendments to the 2013 Rules Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z), Final Rule; Official Interpretations, 78 Fed. Reg. 44686 (July 24, 2013); as further amended by Amendments to the 2013 Mortgage Rules Under the Equal Credit Opportunity Act (Regulation B), Real Estate Settlement Procedures Act (Regulation X), and the Truth in Lending Act (Regulation Z), Final Rule, 78 Fed. Reg. 60382 (Oct. 1, 2013); as further amended by Amendments to the 2013 Mortgage Rules Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z), Interim Final Rule, 78 Fed. Reg. 62993 (Oct. 23, 2013).
- See Comment: Cost and Time Factors in Foreclosure of Mortgages, 3 Real Prop. Prob. & Tr. J. 413 (1968); McElhone and Cramer, Loan Foreclosure Costs Affected by Varied State Regulations, 36 Mortgage Banker 41 (1975); Comment: Power of Sale After , 40 U. Chi. L. Rev. 206, 210–11 (1972); Carey et al., Studies in Foreclosures in Cook County: Foreclosure Methods and Redemption, 27 Ill. L. Rev. 595, 596–609 (1933); Bridewell, The Effects of Defective Mortgage Laws on Home Financing, 5 Law & Contemp. Probs. 545, 549, 555 tbl.1 (1938). For an especially egregious example of a mortgagor using judicial foreclosure motions to avoid the loss of the property, see Ocwen Federal Bank, FSB v. Thacker, 73 Conn. App. 616, 810 A.2d 279 (2002) (foreclosure delayed five times over a period of 2–1/2 years by judicial reopenings of foreclosure judgments and law day extensions).
- Even if title examiners could be convinced that a foolproof waiver existed, it probably would be ineffective against holders of subordinate interests in the mortgaged real estate. If a presumption exists against waiver and if a party must be made aware of the rights she is waiving, how can subsequent grantees of the real estate or junior mortgagees waive their rights? They are not parties to the original mortgage transaction, but they have a significant financial stake in the mortgaged property. It could be argued that these parties take their interests subject to matters of record and that they, therefore, implicitly consent to the terms of previously recorded documents.
- When a foreclosure sale produces surplus proceeds, the rules governing who gets the surplus and in what order are generally clear. The major underlying principle is that the surplus represents the remnant of the equity of redemption and the security that the foreclosure eliminated. Consequently, the surplus stands in the place of the foreclosed real estate and the liens and interests that previously attached to that real estate now attach to the surplus.
- Open Chapter
Table of Cases Part 3 49 results (showing 5 best matches)
- National Real Estate Ltd. Partnership II, In re ………… 779
- North Houston Intern., L.L.C. v. PW Real Estate Investments, Inc. ………… 1054
- Oceanview/Virginia Beach Real Estate Associates, In re ………… 204
- Palcar Real Estate Co. v. Commissioner of Internal Revenue ………… 750
- Real Estate-Land Title & Trust Co. v. Homer Bldg. & Loan Ass’n ………… 213
- Open Chapter
Table of Cases 44 results (showing 5 best matches)
- American Institute of Real Estate Appraisers of Nat. Ass’n of Realtors, United States v. ………… 997
- B.F. Saul Real Estate Inv. Trust v. McGovern ………… 1052, 1054, 1055
- Baltimore Markets v. Real Estate-Land Title & Trust Co. ………… 186
- Barbour v. Handlos Real Estate and Bldg. Corp. ………… 408
- Baypoint Mortgage Corp. v. Crest Premium Real Estate etc. Trust ………… 535
- Open Chapter
Chapter 7. Foreclosure 64 results (showing 5 best matches)
- Under the Restatement, either of two classes of people may pay off a mortgage debt: those who are “primarily responsible” for paying it and those who are not. Who is “primarily responsible”? The concept does not depend on personal liability for the debt. The mortgagor is primarily responsible if she still owns the real estate, whether the debt is recourse or nonrecourse. Likewise, a grantee of the fee title becomes primarily responsible, regardless of whether he assumed liability for the debt. Even a tenant, life tenant, or other limited interest holder is primarily responsible, except to the extent someone else has a duty to reimburse her for part of any payment she makes. Thus, under the Restatement, the mortgage is extinguished and the real estate redeemed if someone who is primarily responsible pays off the debt, including any valid accrued interest, prepayment fees, and other miscellaneous charges.
- Moreover, the tender must be in currency. Tender of a deed to the mortgaged real estate is insufficient even if the real estate is worth more than the outstanding debt.
- In some states that authorize power of sale foreclosures, the deed of trust is the most commonly used mortgage instrument. The mortgagor-trustor conveys the real estate to a trustee who holds it in trust for the mortgagee-beneficiary until the mortgage debt is paid in full. In the event of foreclosure, the trustee exercises the power of sale by a public sale of the mortgaged property. The sale usually is not judicially supervised.
- record interest in the real estate, Some of these states require a newspaper advertisement, but others require only public posting. Other states require published notice and notice by mail or personal service to the mortgagor and to the owner of the mortgaged real estate, but not to junior lienors and others holding an interest subordinate to the mortgage being foreclosed.
- the Mississippi Supreme Court borrowed the “commercial reasonableness” standard that governs the disposition of chattel security under Uniform Commercial Code § 9–504 and applied it to power of sale real estate foreclosures:
- Open Chapter
Advisory Board 9 results (showing 5 best matches)
- Professor of Law, Michael E. Moritz College of Law,
- Professor of Law Emeritus, University of San Diego Professor of Law Emeritus, University of Michigan
- Professor of Law, Chancellor and Dean Emeritus, Hastings College of the Law
- Professor of Law, Yale Law School
- Professor of Law, Pepperdine University Professor of Law Emeritus, University of California, Los Angeles
- Open Chapter
- Publication Date: October 24th, 2014
- ISBN: 9780314278326
- Subject: Real Estate Transactions
- Series: Hornbooks
- Type: Hornbook Treatises
-
Description:
This treatise provides current, expert coverage on the law of mortgages, including the mortgagor-mortgagee relationship prior to foreclosure; mortgage substitutes; transfers by the mortgagor; transfers by the mortgagee; payment and prepayment; the foreclosure process; deficiency judgments and anti-deficiency regulation; priority issues; governmental intervention in the mortgage market; and financing real estate construction.
The Sixth Edition provides a comprehensive update of relevant case law, legislation, and regulation since publication of the Fifth Edition in 2007. This update includes:- A thorough and up-to-date revision of the material on judicial and nonjudicial foreclosure
- New material on “short sales” and “loss mitigation”
- A comprehensive revision of the material on securitization and the ownership, transfer, and enforcement of securitized mortgage loans
- A comprehensive revision of materials on governmental intervention in the mortgage market, including new material on the impacts of the Dodd-Frank Act
- Discussion of recent cases and theories on the application of the “disparate impact” test in racially discriminatory mortgage lending
- A thorough and functional restructuring of the material on bankruptcy law and its impact on mortgagees in Chapters 7, 11, 12 and 13 proceedings
- Comprehensive discussion of recent judicial authority on priority issues
Like the Fifth Edition, the Sixth Edition also comprehensively tracks judicial discussion and application of the principles in the Restatement (Third) of Property: Mortgages.
