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Real Property • Security Interests in Real Estate
PROP#212
Legal Definition
A grantee of the mortgaged property takes subject to the mortgage. The grantee, however, does not assume personal liability—the grantor is the only one personally liable. However, if the mortgage is recorded, it runs with the land and if the grantor does not pay, the mortgage may be foreclosed.
Plain English Explanation
If Amy gets a mortgage on Whiteacre, Amy is obligated to pay back her loan and, if she doesn't, the lender has the right to take Whiteacre (which was used as collateral to secure the loan). If after Amy gets a mortgage on Whiteacre, she transfers Whiteacre to Bob, Amy still owes the lender money and the lender still has the right to take Whiteacre. Bob, however, has no obligation to the lender (unless they assume the mortgage, which we talk about in another card).
Related Concepts
How do states treat a mortgage without a note?
How do states treat a note without a mortgage?
How is a mortgage's priority determined?
How may a party be a holder in due course of a note?
In lieu of foreclosure, what do many installment contracts prefer and how do courts address this alternative?
Under which theories may a mortgagee take possession of a property and begin receiving rents before foreclosure?
What are the 5 types of security interests in real estate?
What are the benefits of the holder in due course status?
What are the limitations of a junior interest?
What are the methods of transferring a note?
What interests does a foreclosure destroy?
What is a deficiency judgment?
What is a due on sales clause?
What is a foreclosure?
What is an installment land contracts?
What is a receivership?
What is a redemption in equity?
What is a statutory redemption?
What is the distribution order of proceeds from a foreclosure?
What is the result of a grantee assuming the mortgage?
What occurs in intermediate theory states?
What occurs in lien theory states?
What occurs in title theory states?
What results from a party purchasing a foreclosed property subject to a senior interest?
What security interests exist under a absolute deed?
What security interests exist under a deed of trust?
What security interests exist under a installment land contract?
What security interests exist under a mortgage?
What security interests exist under a sale-leaseback?
Who may transfer their interest in a mortgage?