Chapter-2-Financing：notes-and-mortgages(内含中文笔记)

1、Chapter 2 Financing: Notes and Mortgages,Contents,NotesMajor Provisions The mortgage instrument Assumption of Mortgage Other financing sources Default Alternative to foreclosure: Workouts Foreclosure Bankruptcy,I. Notes 借据/期票（相当于“抵押贷款合同”）,Serves as an evidence of debt Major Provisions (I): Amount bo

2、rrowed Interest rate Payment amount, number of payments Maturity date Application of payments: Default conditions and penalties,Early payments or Prepayment of outstanding balances 提前还款 A privilege not a right 特权不是权力 Generally for residential mortgage loans, highly restricted for income-producing pr

3、operties 一般适用于住宅贷款，不允许商业贷款 Default and Acceleration Clause 加速还款条款 Lender may accelerate on the note by demanding outstanding balances be paid immediately in case of default 防止违约 Nonrecourse Clause 无追索权条款 Lender will not hold the borrower personally liable in case of default,Major Provisions (II),Maj

4、or Provisions (III),Loan Assumability 贷款续供 Loan assumed by the new buyer to retain favorable financing terms previously negotiated “Due on sale” clause 转售即还条款 Assignment clause 抵押贷款转让条款 Lender can sell the note to another party without approval of the borrower Future Advances 追加贷款 For additional fun

5、ds 房主自己要求 Release or extinguishment of lien by lender 解除或灭失抵押权 when the loan is fully repaid,II. Mortgage Instrument,Utilization of mortgage financing has been the most common method of financing the purchase of real estate, esp. residential properties. 最好的抵押物品 Real estate is generally regarded as e

6、xcellent security for a loan, since the lender acquires a secured interest in the real estate with a mortgage. 担保权益 Two sources for the loan be repaid: The borrowers repayment 作为抵押并还钱 The property serves as a security,Definition of a mortgage,A mortgage is created in a transaction whereby one party

7、pledges real property to another party as security for an obligation owed to that party. A promissory note 应付票据/借款合同 Mortgage is evidenced by a separated promissory note. mortgage和note的联系 A written promise to pay or repay a specified sum of money at a stated time or on demand. 一种书面承诺，抵押的证据,Interest

8、that can be mortgaged,Any interest in real estate that can be transferred Fee simple estates, reversions, remainders, life estates, estates for years, leasehold interests, options to buy real estate, etc. 任何一种权益都可以被抵押,Minimum mortgage requirements,In writing: Institutional lending with standardized,

9、 formal documents, to expresses intent of parties and meet the requirements by the state law where the mortgaged property located;书写上要正规 Major subjects: Identification of the mortgagor and mortgagee 双方的识别 Legal description of the real property 房产权的法律描述 Covenants of legal possession and warranty 依法占有

10、及担保契约 Provision for release of dower/curtesy rights 亡夫/亡妻遗产权免除条款,Important Mortgage Clauses (I),Funds for Taxes, Insurance, Charges Mortgagor pays amounts to cover: 抵押人需付 All taxes 任何税 premiums of property fire, casualty and hazard insurance 意外保险 assessments charges 估价师估价 any other charge or fee tha

11、t have priority over the mortgage 任何费用 Mortgagees security interest can be wiped out if these claims, liens are not paid since they are can attain priority over the mortgagee. 如果这些要求没有达到，抵押人的权益会被消除。,Important Mortgage Clauses (II),Property Preservation and Maintenance Mortgagee has a valid interest

12、in preventing the mortgaged property from deteriorating. 不能毁坏房屋 Due on sale clause 转售即还条款 Enable the mortgagee to protect his or her security interest by approving any new owner. Borrowers Right to Reinstate 借款人恢复权 To reinstate the original repayment terms in the note after an acceleration of debt i

13、s caused. 加速还款之后 To cease the foreclosure proceedings before a court decree 法院裁决前,Important Mortgage Clauses (III),Lender in Possession （upon acceleration and abandonment ) 贷款人占有 Mortgagee may enter the property to protect the security Rent will be collected until the foreclosure Future Advances 追加贷

14、款 Open-end mortgage 开放式抵押/可加抵押, e.g. construction loans, as the structure progresses, the mortgagor has the right to call upon the mortgagee for successive advances on the loan. Subordination clause 设定从属秩序的条款 Sellers loan for buyer subordinate to the financial institutions loan over the same propert

15、y,III. Assumption of Mortgage 抵押债务的承担,When a property is sold with a loan assumption: Grantee (buyer) of the mortgaged property assumes and agrees to pay the amount of the obligations owed to the mortgagee 买主从卖主那里承担 Responsibility of loan repayment be shifted from the grantor to the grantee 责任转移,Ass

16、umption of Mortgage顶按,Grantor then acts as a surety (担保人）of the grantee for the payment of the debt 原业主担保 Mortgagee may or may not release the grantor from personal liability for the mortgage debt. Release Conditions: 不一定解除原业主债务 Grantees financial capabilities, property value, whether the mortgagee

17、is compensated in some way, e.g. a higher interest rate,IV. Acquiring Title “Subject to” a Mortgage,Title “Subject to” a Mortgage 获得带有抵押的产权 an unconventional real estate financing technique where the title of a property is transferred to a buyer (grantee) of the property.类似顶按，留置权留给下一任 Grantee would

18、like to acquire a title “subject to” a mortgage at a fair price. 合理价格转让 Grantee keeps up to pay the mortgage.,Title “Subject to” a Mortgage 带有抵押的产权 Grantees may default if they find that there is no longer any advantage to making further payments, or they become financially unable to pay. 第二任业主较易违约，

19、因为不是第一付款责任人 In case of default, the grantee will lose whatever equity they have invested in property, but cannot be held personally liable for the outstanding balance. It is the grantor not the grantee who are personally liable for the loan, so it is riskier for the grantor (since he may face forecl

20、osure).,Property Covered by a mortgage 抵押包括的东西 Land 土地 Any improvement attached 附属品 Easements (before or after the mortgage is executed)留置权 Fixtures 固定设施: tangible personal property Exception of “trade fixtures” by a tenant除了 营业装璜 Rights to natural resources 对自然资源的支配 (in some cases) Rights to rents

21、and profits from the real estate After-acquired property 抵押发生后取得的财产 included in the security covered by the mortgage Additional improvements, fixtures，etc.,V. Additional Mortgage Concepts,Additional Mortgage Concepts,Senior Mortgage 优先抵押债务 The first or prior mortgage Junior Mortgages 次级抵押债务 the seco

22、nd mortgage, to bridge the gap between the price of the property and the down payment requirement by the first mortgage usually short-term, higher rate Recording of Mortgages A recorded mortgage protects its holder by giving him priority over the subsequent acts of the mortgagor. The priority of suc

23、cessive lien is determined by the time of recording.,VI. Other Financing Sources,Seller Financing 卖方信贷，一般是买方信贷 When third-party (financial institutions) mortgage financing is too expensive or unavailable 金融机构融资高 buyers credit does not qualify the requirements of down payment or monthly payment 买方信用不

24、够 The seller could receive a higher yield on their investment by negotiating a higher interest rate as well as a higher selling price. 卖方提供一个更长时间更高价格更高价的 i.e. PurchaseMoney Mortgage 买价抵押 Could be a first mortgage or a second mortgage,Land Contracts: real estate contract, installment sales contract,

25、agreement to convey, contract for deed 分期支付购房款 Payment in stipulated installments Not a mortgage, the seller retains the title; 不是抵押，原业主有title Seller conveys title when purchaser completes the performance of the obligations 完成全部付款之后才转移TITLE Be used as a substitute for a purchase-money mortgage yet n

26、ot preferred if the latter one were available 不太受欢迎？ The same situation as purchasemoney mortgage: the buyer has difficulty obtaining third-party financing. 买房者很难再获得第三方贷款,VI. Default,Default: A failure to fulfill a contract, agreement, or duty , esp. a financial obligation such as a note. A mortgage

27、 default: any breach of mortgage contract 合同任何一个细则 a failure to meet the installment payment on the note. Technical default: a failure to keep the security in repair Difficult for the mortgagee to prove unless the property shows definite evidence of the effect of waste If accompanied by abandonment,

28、 the mortgagee could act quickly to protect the property against vandalism, neglect, and waste.,VII. Alternative to Foreclosure: Workouts,Foreclosure: involves juridical sale of the property to satisfy the unpaid debt 司法出售 Time and various costs associated with this process,Workouts (解决办法）: Various

29、activities undertaken to deal with a mortgagor who in a financial trouble借款人解决财务问题 Lenders refrain from exercising legal remedies放款人避免走法律程序 Borrowers supply their current detailed financial and other information to the lenders 财务透明 e.g. establish a cash account strictly regulated by the lenders,Five

30、 alternatives-1,1. Restructuring the Mortgage Loan Recasting : changing the terms of the mortgage temporarily or permanently lower interest rate, amortization period, nonrecourse to recourse Extension Agreement A longer amortization period for the remaining principal balance Temporary grace period D

31、epends upon the bargaining position of mortgagor and mortgagee Alternatives to Extension Agreement Informal arrangement without making any change in the formal recorded mortgage agreement Serves the temporary needs of mortgagors and mortgagees,Five alternatives-2,2. Transfer of mortgage to a new own

32、er Assumption of Mortgage Acquiring title “subject to” a mortgage,Five alternatives-3,3. Voluntary Conveyance (to mortgagee) 自愿转让 Cost of foreclosure may exceed the expected benefit Conveyance of title for a release from the mortgage debt to save time, trouble and expense associated with foreclosure

33、 Giving deed in lieu of foreclosure 给契约代替止赎 Some practical financial issues: junior liens Junior liens are not eliminated by a voluntary conveyance 不能自动消除第二留置权 Foreclosure provides the mortgagee with a lawful method of becoming free from the liens of the junior claimants,Five alternatives-4,4. Frien

34、dly Foreclosure Mortgagor waives any right to assert defenses and claims and to appeal or collaterally attack any judgment, and to cooperate with the mortgagee Take more time than a voluntary conveyance yet less time than an unfriendly foreclosure,Five alternatives-5,5. Prepackaged Bankruptcy 预先包装的破

35、产 Bankruptcy may undermine the lenders asset, esp. when collateral is worth less than the principal amount of the debt, the deficiency will be treated as an unsecured debt. In a prepackaged bankruptcy, before filing the bankruptcy petition, borrowers make deals with all their creditors that they wil

36、l turn their assets over to the creditors in exchange for a discharge of liabilities. Less time and expense than bankruptcy,VIII. Foreclosure,Mortgagees are usually unwilling to start the foreclosure proceedings Time-consuming process Management and disposal of property is costly and requires skills

37、. Two types of remedies: Judicial Foreclosure：obtain and execute the judgment against the mortgagors property not limited to the mortgaged property 法院裁决 A decree of foreclosure and sale: balance of the sale goes to the mortgagor. 拍卖,Foreclosure,Redemption 赎回 Canceling or annulling a title conveyance

38、 by a foreclosure sale by paying the debt or fulfilling other conditions of the mortgage. The law in most states gives the homeowner every opportunity to stop the process leading to foreclosure, right up to the minute that the auctioneers gavel comes down. Equity of redemption prior to foreclosure.,

39、Equity of Redemption 赎回抵押品的权利 Prior to foreclosure Right of Statutory Redemption: 法定赎回权 right to redeem after foreclosure exists in about half of the states in America Statutory period: 6 months -1 year after foreclosure,Foreclosure,Sale of Property Fixing a price: An assumption: a public auction is

40、 a satisfactory way to realize the best possible price in selling property The highest bidder gets the property Mortgagee can use his claims as a medium of exchange in the purchase; other must pay cash Upset price (拍卖时之底价) must be reached in the bidding; otherwise the court will refuse to confirm th

41、e sale.,Nature of Title at Foreclosure Sale,Any title defect that existed prior to the foreclosure sale will continue with the title as it passes to the purchaser.,Parties to Foreclosure Suit,Senior Lienors vs. Junior Lienors All claimants should be involved in a foreclosure suit Senior Lienors: the

42、 failure to include all of the claimants may improve their position with the foreclosure of the senior lien A careful search of all junior lien claimants is necessary,Junior Lienors:,In foreclosure sale, junior lienors must honor the prior position of senior lienors, yet may wipe out liens junior to

43、 theirs. 高于第二留置权人 If senior lienors or a third party purchases the property at a foreclosure sale, the junior liens are of no further force or effect. 赎回权取消后，留置权失效，但是债权人享有对抵押人的追索权。 So, it is common for the senior and junior lienors to reach an agreement in advance concerning settlement of their clai

44、ms before the foreclosure. When junior lienors plan to buy the property at foreclosure sale, they may prefer to pay off the senior lienors.,Effect of Foreclosure on Junior Lienors,First mortgage A $90,000 Second mortgage B $20,000 Third mortgage C $10,000 Total liens $120,000,Effect of Foreclosure o

45、n Junior Lienors,Any surplus remaining after satisfying the costs of foreclosure and the claims of the senior lienors is distributed according to the priority rights of the junior claims. While a senior mortgage is properly foreclosed, it extinguishes the junior lien, but the debt secured by the mor

46、tgage is unaffected. For junior lienors, if no surplus of sale price, they are merely general , unsecured creditors of the mortgagor, unless the mortgagor has other properties attached or their economic status improved in the future.,Deficiency Judgment 金额不足裁决,Property price fails to cover claims of

47、 the mortgagee, i.e. a continuing claim by the mortgagee against the mortgagor. Deficiency Judgment is an unsecured claims, a lien attached only to real estate or other property the debtors hold or may acquire in the future. no right of preference against any of the non-real estate assets of the deb

48、tor 短额裁定权益只对不动产资产或债务人未来取得的这类资产有效。 Debtor will be careful to have titles in the future better in the names of others Applicability is strictly limited in some states.,Taxes in Default,Tax lien 税金留置权 A superior lien prior to the claims of mortgagee tax-collecting authorities have the right to foreclos

49、e in case of default (delinquent taxes 欠税） 征税留置权享有最高优先权，受押人喜欢通过替抵押人缴纳所欠税款的方式取得征税留置权。 Mortgagees prefer to maintain the priority claim of tax liens by paying delinquent taxes and add them to their claims In a foreclosure sale, the purchaser is usually expected to pay all delinquent taxes. 拍卖中标者通常要偿清所有拖欠税款,Tax sales 欠税不动产的拍卖,Where the mortgagee do not act to protect their interests against the tax lien, taxing authorities will co