1What are the three types of Deeds?
(1) General Warranty Deed
(2) Special Warranty Deed
(3) Quitclaim Deed
2Deed that warrants agaisnt all defects in title, whether they arose before or a fter the grantor took title.
General Warranty Deed
3Deed that warrants against defects in title arising from the grantor's acts.
Special Warranty Deed
4Deed that contains no warranties
Conveys whatever title the grantor has to the grantee
Quitclaim Deed
5What are the six types of of Covenants of Title?
(1) Covenant of Seisin
(2) Covenant of Right to Convey
(3) Covenant against Encumbrances
(4) Covenant of Quiet Enjoyment
(5) Covenant of Warranty
(6) Covenant of Further Assistance
6Covenant of Seisin
Grantor is seised of the property
7What is the measure of damages for breach of the covenant of seizin?
• Measure of damages for breach of the covenant of seizin includes the consideration recited in said remote deed, and interest at the legal rate from the date when PL received conveyance, upon the ground that this is the actual loss.
8Seisin
Possession of land by freehold (permanent and absolute tenure of land or property with freedom to dispose of it at will.)
9What are the majority and minority rules regarding the covenant of seisin?
In most jurisdictions, the covenant of seisin doesn't run with the land, and a remote grantee therefore cannot recover for a breach.
10A case that holds that in Iowa is a minority, in most jurisdictions, the covenant of seisin runs with the land, and a remote grantee therefore can recover for a breach.
But in most jurisdictions, the covenant doesn't run with the land, and a remote grantee therefore cannot recover for a breach.
Rockafellor v. Gray
Iowa Supreme Court
191 N.W. 107 (1922)
11Covenant of Right to Convey
Grantor has the right to sell and convey the property
12What two reasons might homeowners take out a loan to pay the balance of the purchase price beyond the down payment.
(1) because they couldn’t pay the full purchase price (the usual reason); and/or
(2) because they wanted to take advantage of the tax deduction for interest paid on a home mortgage.
13What two components does financing a home involve?
(1) The promissory note
(2) Mortgage
14How many mortgage markets are there?
Today, there are two mortgage markets, not one.
This secondary mortgage market began when Congress established the Federal National Mortgage Association (Fannie Mae) in 1938 and the Federal Home Loan Mortgage Corporation (Freddie Mac) in 1970.
15Why were government-sponsored enterprises created in establishing a secondary mortgage market?
These government-sponsored enterprises were created to establish a secondary market in which mortgages could be bought and sold much like stocks, thereby evening out credit flows across the nation.
16The first mortgage loaned out, before it is sold on a secondary market.
“first lien” mortgage loan originations.
17• Warns that the immediate transfers of property can be executed by deed, but transfers that will take place after a grantor dies should be done by a will.
• A property transfer is only valid if the transferor intends for the transfer to take effect immediately upon delivery of the deed.
Rosengrant v. Rosengrant
Court of Appeals of Oklahoma
629 P.2d 800 (1981)
18Briefly, how does securitization and the secondary mortgage market work?
(1) A lender, called the mortgage originator, makes the initial mortgage loan to the borrower.
(2) They sell the loan to a third party, called a sponsor or arranger, who purchases many mortgage loans.
(3) The loan is now off the lender’s balance sheets, enabling it to expand its lending faster than it would otherwise be able to do.
(4) The loans are eventually assigned to a special purpose entity (usually in the form of a special trust).
(5) The securities are then sold and traded by private capital markets investors.
19What functions does Securitization serve?
(1) Increases liquidity of the mortgage market, as it's essentially a funding device that replaced the older inefficient funding mechanism.
(2) Removes loans from lenders’ balance sheets, freeing them to make more loans.
(3) Transfers the responsibility of loan servicing to a separate party.
20When a borowee paid less than the full interest accruing on the debt, which led to the growth rather than the decline of mortgage principal.
“Negative Amortization”
21In order for a valid property transfer to occur, the grantor must do what two things?
(1) actually or constructively deliver the deed to the grantee or another; and
(2) intend to make a present transfer.
22The property if free and clear of all encumbrances (including but not limited to liens, mortgages, easements, restrictive covenants, or equitable servitudes)
Covenant against Encumbrances
23May a visible and notorious easement be considered "OK" under Covenant against Encumbrances?
No, visible and notrious easements are considered "OK"
24What is the minority rule for the Covenant against Encumbrances?
Any easement actually known to the grantee doesn't violate the covenant.
25T/F: Encumbrances assumed by the grantee (such as a mortgage) or beneficial to the grantee (utility easements) do not violate the Covenant against Encumbrances?
True
26Are encumbrances assumed by the grantee (such as a mortgage) or beneficial to the grantee (utility easements) violate the Covenant against Encumbrances?
No
27What are the three Present Covenants?
(1) Covenant of Seisin
(2) Covenant of Right to Convey
(3) Covenant against Encumbrances
28What are the three types of Deeds?
(1) General Warranty Deed
(2) Special Warranty Deed
(3) Quitclaim Deed
29Grantee will quietly enjoy the property (i.e. will not be evicted by grantor, grantor's agents, or holder of paramount title)
Covenant of Quiet Enjoyment
30Grantor will warrant and defend the grantee against any conflicting claims to the property
Covenant of Warranty
31Grantor will executre a document or take other actions necessary to perfect the grantee's title (See also estoppel by deed)
Covenant of Further Assurances
32If, by warrant deed, grantor conveys land that they don't own, and grantor subsequently acquires title to the land, the grantor is estopped to deny that they had title at the time of the transfer: the subsequently acquired title automatically passes to the grantee.
May also be applied to the quitclaim deeds if the deed represents that the grantor had title.
Estoppel by Deed
33Can Estoppel by Deed apply to Quitclaim Deeds?
Yes, Estoppel by Deed can apply to Quitclaim Deeds if the deed represents that the grantor had title.
34To be effective, a deed must be delivered with the intent that it have present effect.
Delivery
35T/F: Future covenants run with the land and thus protect remote grantees until a breach occurs?
True
36T/F: Future covenants don't run with the land and thus protect remote grantees until a breach occurs?
False
37• Under common law, only the immediate grantee has a cause of action against the grantor.
• The cause of action for breach was personal property and didn't run with the land
• This is still the majority rule
Present Covenants
38What is the majority rule for present covenants?
Only the immediate grantee has a cause of action against the grantor, and so it doesn't run with the land.
39The cause of action is impliedly assigned to subsequent grantees, subject to the statute of limitations.
Rockafellor Covenant
40Is it customary to state in a deed that some consideration was paid by the grantee?
• Yes, it's customary to state in a deed that some consideration was paid by the grantee, in order to raise a presumption that the grantee is a bona fide purchaser entitled to the protection of the recording acts against prior unrecorded instruments.
• Neither customary nor necessary to state the exact consideration given.
41What must happen for delivery to be considered effective?
To be effective, a deed must be delivered with the intent that it have present effect.
42May a deed be delivered without handing it over?
Yes, for example, the grantor may execute a deed and place it somewhere with the intention that title shall pass to the grantee immediately.
43What happens if the intention of the title is that it shall pass to the grantee at the grantor's death?
The deed is then considered an attempted will and probably invalid, because it doesn't comply with the Statute of Wills
44How may a Grantor make delivery effective?
By handing the deed over to the grantee or placing the deed in the hands of a third party (escrow agent) who will deliver to grantee at closing.
45What happens if the grantor can recall the deed from the agent?
Then the deed is considered recovable, rather than true, escrow, and no delivery.
46What is a revocable deed?
A deed that is not true and therfore not delivery.
47What happens if the deed is placed in escrow and then the grantor dies before the escrow agent delivers it to the grantee?
It's considered a valid transfer, because the date of the transfer relates back to the date of delivery to the agent.
48What do all deeds share?
Several basic requiremenst including:
(1) In writing
(2) Identify the grantor and grantee
(3) Describe the property to be conveyed
(4) State the grantor's intent to convey
(5) Contain the grantor's signature
49Where does the writing and signature requirements for a Deed derive from?
The Statute of Frauds
50Does the signature alone satisfy the requirements of identification of the grantor?
No, the signature alone doesn't satisfy the requirements of identification of the grantor.
51If the grantee's name is missing, is the deed considered void?
Yes, the deed is considered void and not given effect until the name is later added.
52What do some customary methods of description include?
(1) Reference to natural or artificial monuments and, from the starting point, reference to directions and distances ("metes and bounds");
(2) Reference to a government survey, recorded plat, or some other record.
Reference to the street and number or the name of the property.
(3) Reference to the street and number or the name of the property.
53Is it customary to state in a deed that some consideration was paid by the grantee?
• Customary to state in a deed that some consideration was paid by the grantee, in order to raise a presumption that the grantee is a bona fide purchaser entitled to the protection of the recording acts against prior unrecorded instruments.
• Neither customary nor necessary to state the exact consideration given.
54Is it customary to state in a deed that some consideration was paid by the grantee?
• Yes, it's customary to state in a deed that some consideration was paid by the grantee, in order to raise a presumption that the grantee is a bona fide purchaser entitled to the protection of the recording acts against prior unrecorded instruments.
• Neither customary nor necessary to state the exact consideration given.