- John Lawliss, seeking to raise money to pay his American
Express bills from a trip over Spring Break, mortgages his condo in One Charles
Condominium in Boston to Brandon Holub in exchange for $100K. He defaults
on his mortgage payments, but Holub is relaxed about it. Mary Volk, on the
other hand is offended by what she considers Lawliss's casual approach to
satisfying his obligations. She files an action in the relevant court in Boston
to foreclose on the condo, and buys it at the foreclosure sale for $7500.
She then almost immediately "flips" it for $300K to Sara Smith.
Can Lawliss get the property back from Smith? How?
- Lawliss, outraged, complains to Holub. Holub says, "I
never heard of her, let alone sold my mortgage to her." But then Holub
secretly contacts Volk and says he will transfer his mortage to her "to
clean up the paperwork" in exchange for half of her $292,500 profit.
She happily agrees, pays Holub $146,250, and he assigns the mortgage to her.
How does this affect the outcome?
- Suppose all this involved a condo in PT, in Chicago. Where,
specifically, would you look to see if IL law is different from MA law?
- Mother Hubbard paid off Evanston house she bought for $20K
in 1950; now worth $400K
" "Home equity mtg" for $390K 30-yr ARM
" $1644 @ 3pct
" $2338 @ 6 pct
" Kept $300K in bank @ 3.5%= $875/mo
" SS benefit=$917/mo
- She sells, for $400K
" What does buyer get
" What does she have afterward
- Deal is that buyer pays Mother Hubbard $1644 per month; Mother
Hubbard continues as mortgagor
" Interest rates go up to 6%; MH defaults
" Lender forecloses
" House sells for $300K
" House sells for $450K
" House sells for $100K to lender
" Lender's secretary bid $90K
" Auction in Homewood at 2300 in back of bar