Because securitized mortgages involve public or private offerings of securities, they require a broader range of legal expertise than conventional mortgages
Article Abstract:
Securitized mortgages offer the benefits of liquidity and superior interest rates compared to traditional mortgage transactions, but they pose special problems and greater transaction costs. Such mortgages involve the creation of a special trust and an offering of securities. Because of the greater number of people, volume of documentation, and range of legal expertise required, the special tax and bankruptcy issues raised, and the demands of rating agencies, securitized mortgages carry many hidden costs.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1995
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'Reverse mortgages' require specialized insurance: certain loans that allow senior citizens easier access to home equity raise coverage issues
Article Abstract:
Reverse mortgages offer loans to primarily older homeowners against the equity in their house, often with no need for repayment until the borrower dies or the home is sold. While the potential for such a market has long existed, it did not develop until the Dept of Housing and Urban Development launched a federally insured pilot project. Special insurance is needed, in part because of state laws, to protect both the borrower as well as the lender against credit risk and other potential problems.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1995
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Some courts say that mortgagees can reach the personal assets of mortgagors not only if they damage the property but if they fail to pay the taxes owed on it
Article Abstract:
Courts are increasingly willing to hold mortgagees personally responsible for waste to the property, and to treat failure to pay property taxes as such a waste. Even if no terms in the loan documents impose personal liability for waste, the lender may have a valid tort claim for related damages. Non-payment due to the property's inability to generate income, arising out of a broader economic slump, is part of the risk the lender assumes.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1995
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