Section 876 IAC 2-14-4 - Financing instrumentsAuthority: IC 25-34.1-2-5
Affected: IC 25-34.1-5
Sec. 4.
(a) The competency and instructional level for subdivisions (1) through (4) and (6) is Level 2. The competency and instructional level for subdivision (5) is Level 3. The following are concepts of the mortgage note: (2) Essential elements including the following: (A) Promise to pay a fixed sum.(C) Signature of obligor (borrower).(3) Special note provisions including the following: (B) Prepayment (penalty) clause.(4) Negotiability of note.(5) Principal and interest (debt service) including the following: (C) Use of amortization tables. (Note: students should be afforded considerable practice using amortization tables.)(6) Payment (amortization) plans including the following: (A) Constant or level payment plan.(B) Variable (or adjustable) interest rate plan.(C) Graduated payment plan.(D) Balloon payment plan.(b) The competency and instructional level for subdivisions (1) through (3) is Level 2. (Use sample form for illustration.) The following are concepts of the mortgage instrument: (1) Distinction between a mortgage and deed of trust.(2) Parties to mortgages.(3) Essential elements including the following: (A) Must be in writing (statute of frauds).(B) Mortgagor-owner must have contractual capacity.(C) Mortgagor-owner must have a valid interest in the property.(D) A valid debt (to be secured by the mortgage) must exist.(E) Valid legal description of property.(G) Mortgagor's/owner's signature. (H) Delivery and acceptance.(c) The competency and instructional level for subdivisions (1) through (2) is Level 2. The following are concepts of rights of mortgage lenders: (1) Right to foreclosure including the following: (B) Power of sale (nonjudicial).(2) Right to transfer (assign) the mortgage.(d) The competency and instructional level for subdivisions (1) through (2) is Level 2. The following are concepts of rights of borrowers: (2) Right (equity) of redemption.(e) The competency and instructional level for subdivisions (1) through (3) is Level 3. The following are concepts of sales of mortgaged property (Explain procedures and legal effect of each of the sales below.): (1) Cash sale (existing mortgage paid off and new mortgage obtained, if necessary).(2) Sale with assumption of existing mortgage; release of liability and restoration of benefits on VA mortgage.(3) Sale subject to existing mortgage.(f) The competency and instructional level for subdivisions (1) through (2) is Level 2. The following are concepts of mortgage priorities: (1) Effect and importance of recordation.(2) Subordination of mortgages.Indiana Real Estate Commission; 876 IAC 2-14-4; filed Dec 1, 1989, 5:00 p.m.: 13 IR 668; readopted filed Jun 29, 2001, 9:56 a.m.: 24 IR 3824; readopted filed Jul 19, 2007, 12:57 p.m.: 20070808-IR-876070067RFA