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Who Gives? Who Receives? -OR -EE

Legal Theories of Mortgages Title Theory –Title conveyed to lender through a mortgage deed Lien Theory –Borrower retains title –Lender is protected with a lien

Title Insurance Lender’s (Mortgagee) policy – Amount of loan; transferable Owner’s (Mortgagor) policy – Sale price; not transferable Simultaneous Issue—issued together by the same company

Deed Definition A written document that transfers an ownership interest in real property from a seller (grantor) to a buyer (grantee).

Deed Clauses Premises –Granting clause Habendum –To have and to hold Seisin –Right to convey Covenant against encumbrances

W HAT IS A M ORTGAGE? A Piece of Paper A lien NOT a Loan

Names and Parties –Mortgagor Borrower Gives mortgage as security to repay Usually Grantee –Mortgagee Lender Owns the mortgage Usually NOT Grantor or Grantee

Foreclosure Default Lis Pendens Forbearance Deed in lieu of foreclosure. Equitable Right of Redemption

Restrictions on Ownership Government restrictions –Police power –Eminent domain –Taxation (property) Private restrictions –Deed restrictions –Easements –Leases –Liens

Legal Title Actual notice –Direct knowledge Constructive notice –Acknowledgment Formal declaration before a notary— signing is a free act –Lis pendens Constructive notice of legal action Townspeople witness

Rights of Ownership D isposition (sell or give away) U se (control) P ossession (occupy) E xclude (quiet enjoyment)

Estates and Tenancies: Freehold Estate—the degree, quantity, nature, and extent of the bundle of rights Freehold estate - an indefinite period –Fee simple – most comprehensive—can be inherited (also, fee, fee simple absolute) –Life estate - measured by a lifetime Estate in reversion Remainder estate owned by remainderman

Other Terms Severalty—one owner Co-ownership—concurrent owners Leasehold—Interest not of an owner Coops, Condos, Timeshares— Partial Ownership