1. Sarah lives in a unique home with an Old West theme. The home contains a...

 

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1. Sarah lives in a unique home with an Old West theme. The home contains a saloon with working animatronics, a working miniature railroad and track, and similar Old West-theming throughout the interior and exterior of the property. No similar homes exist in the area. When Sarah sells the property, what method is an appraiser likely to use? 2. BigMart, a corporation, has obtained a loan to assist in purchasing real property for its expansion efforts. The company has dealt directly with BigMoney Lending, a lender. In the past, BigMoney Lending has provided BigMart many other loans, which are secured by different parcels of land as collateral. BigMoney Lending is concerned that BigMart's expansion efforts may not be successful. BigMoney Lending wants to protect its interests by requiring that, in the event of a default under one of BigMart's loans, all loans will be in default. In addition, BigMoney Lending wants to make sure that all the collateral BigMart has provided can be used to satisfy a default under any of the loans. What type of provision should BigMoney Lending use in its mortgage with BigMart? 3. A mortgage loan has a principal balance of $250,000. The interest rate is fixed for five years and then every six months thereafter will adjust to the LIBOR rate plus 2 percent. What type of mortgage loan is this? 4. The Greens obtained a mortgage from First Home Savings and Loan. The mortgage contained a clause that stated, "[T]his mortgage shall become due and payable forthwith at the option of the mortgagee if the mortgagor shall convey away said premises or if the title thereto shall become vested in any other person or persons in any manner whatsoever." What type of promissory note clause is this? 5. Mr. Oyer purchased a home from Mr. and Mrs. Richards. He took the property "subject to" a mortgage that the Richards had secured on the property. Oyer never agreed to "assume" the mortgage. Oyer defaulted in making payments to the mortgage holder. The holders of the note and mortgage sued Oyer and the Richards. Who is liable to the mortgage holder? 6. Explain how a mortgage differs from a deed of trust. 7. Ariel obtains a purchase money mortgage to purchase a home. He takes out a $375,000 mortgage. After two years living in the home, an economic recession leaves Ariel without a job. He is unable pay his mortgage, and unfortunately his home has decreased in value to $350,000. At that time, he owes the bank $365,000 on the mortgage. The lender forecloses on his property. Will Ariel owe the bank the $15,000 difference? Are there any protections available to Ariel? 8. Dora is negotiating the sale of her home to Brittany. Dora will lend the purchase price to Brittany since Brittany has poor credit. Brittany will pay the debt to Dora in monthly payments over the next fifteen years. The parties are debating how to structure the transaction: with a mortgage or through an installment land sale contract. Which form will Brittany likely prefer and why? Which form will Dora likely prefer and why? 9. Research your state law to determine if it permits the use of a trust to purchase a home. 10. Research the laws of your state to determine what remedies are available when default occurs under an installment land sale contract. 1. Sarah lives in a unique home with an Old West theme. The home contains a saloon with working animatronics, a working miniature railroad and track, and similar Old West-theming throughout the interior and exterior of the property. No similar homes exist in the area. When Sarah sells the property, what method is an appraiser likely to use? 2. BigMart, a corporation, has obtained a loan to assist in purchasing real property for its expansion efforts. The company has dealt directly with BigMoney Lending, a lender. In the past, BigMoney Lending has provided BigMart many other loans, which are secured by different parcels of land as collateral. BigMoney Lending is concerned that BigMart's expansion efforts may not be successful. BigMoney Lending wants to protect its interests by requiring that, in the event of a default under one of BigMart's loans, all loans will be in default. In addition, BigMoney Lending wants to make sure that all the collateral BigMart has provided can be used to satisfy a default under any of the loans. What type of provision should BigMoney Lending use in its mortgage with BigMart? 3. A mortgage loan has a principal balance of $250,000. The interest rate is fixed for five years and then every six months thereafter will adjust to the LIBOR rate plus 2 percent. What type of mortgage loan is this? 4. The Greens obtained a mortgage from First Home Savings and Loan. The mortgage contained a clause that stated, "[T]his mortgage shall become due and payable forthwith at the option of the mortgagee if the mortgagor shall convey away said premises or if the title thereto shall become vested in any other person or persons in any manner whatsoever." What type of promissory note clause is this? 5. Mr. Oyer purchased a home from Mr. and Mrs. Richards. He took the property "subject to" a mortgage that the Richards had secured on the property. Oyer never agreed to "assume" the mortgage. Oyer defaulted in making payments to the mortgage holder. The holders of the note and mortgage sued Oyer and the Richards. Who is liable to the mortgage holder? 6. Explain how a mortgage differs from a deed of trust. 7. Ariel obtains a purchase money mortgage to purchase a home. He takes out a $375,000 mortgage. After two years living in the home, an economic recession leaves Ariel without a job. He is unable pay his mortgage, and unfortunately his home has decreased in value to $350,000. At that time, he owes the bank $365,000 on the mortgage. The lender forecloses on his property. Will Ariel owe the bank the $15,000 difference? Are there any protections available to Ariel? 8. Dora is negotiating the sale of her home to Brittany. Dora will lend the purchase price to Brittany since Brittany has poor credit. Brittany will pay the debt to Dora in monthly payments over the next fifteen years. The parties are debating how to structure the transaction: with a mortgage or through an installment land sale contract. Which form will Brittany likely prefer and why? Which form will Dora likely prefer and why? 9. Research your state law to determine if it permits the use of a trust to purchase a home. 10. Research the laws of your state to determine what remedies are available when default occurs under an installment land sale contract.