Deficiency, surplus and redemption Bar Exam Flashcards - Medical Study Cards
Master Deficiency, surplus and redemption with Oncourse flashcards. These spaced repetition flashcards are designed for medical students preparing for NEET PG, USMLE Step 1, USMLE Step 2, MBBS exams, and other medical licensing examinations.
Deficiency, surplus and redemption Flashcard Deck - 9 Cards
Flashcard 1: What are the three passes for reading a supplied legal rule, according to the lesson?
Answer: 1. Locate verbs and timing words. 2. Separate the elements from exceptions. 3. Map each fact to one phrase from the supplied text.
Flashcard 2: What is the difference between a deficiency and a surplus after a foreclosure sale?
Answer: A deficiency is the remaining debt when the foreclosure sale proceeds are less than the secured debt and permitted costs; the lender may obtain a personal judgment unless barred by an anti-deficiency rule. A surplus is excess sale proceeds, distributed first to subordinate lienholders and then to the mortgagor or other entitled owner.
Flashcard 3: What two key factors determine if a mortgage is a purchase-money mortgage?
Answer: The two key factors are purpose and timing: the funds must finance the buyer’s acquisition of the land, and the mortgage must arise in that acquisition transaction.
Flashcard 4: What is the key structural difference between a conventional mortgage and a deed of trust?
Answer: A conventional mortgage is a two-party instrument (mortgagor and mortgagee). A deed of trust is a three-party instrument involving a trustor (borrower), a trustee (holds legal title), and a beneficiary (lender).
Flashcard 5: What is the equitable right of redemption, and when must it be exercised?
Answer: The equitable right of redemption allows the borrower to recover the property by paying the secured debt, interest, and permissible costs before the foreclosure sale. A mortgage agreement generally may not waive or clog this right in advance.
Flashcard 6: What is the effect of a foreclosure sale conducted for less than fair market value?
Answer: A sale may be challenged or a deficiency reduced if the mortgagee failed to follow required procedures or the sale price is grossly inadequate under applicable law. Mere inadequacy of price ordinarily is not enough without additional procedural irregularity or unfairness.
Flashcard 7: What is the basic relationship between a mortgage and the promissory note it secures?
Answer: The mortgage is a security instrument creating an interest in land to secure repayment of the note, while the note is the borrower’s personal payment obligation. A transfer of the note generally transfers the mortgage as an incident of the debt.
Flashcard 8: What is the usual priority rule among competing mortgages?
Answer: Priority generally follows first in time of attachment or recording under the applicable recording statute. A purchase-money mortgage usually receives special priority over prior interests in the purchased property, subject to statutory exceptions.
Flashcard 9: What must a mortgagee generally do before conducting a valid foreclosure?
Answer: The mortgagee must establish a default, comply with any contractual cure or acceleration requirements, and provide the notice and opportunity to be heard required by law. Judicial foreclosure requires court proceedings; a power-of-sale foreclosure must satisfy applicable statutory notice and sale procedures.
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