Ann Sells to Bob Property, Which Has a $50,000 Mortgage

question 1

Essay

Ann sells to Bob property, which has a $50,000 mortgage in favor of First Bank. Bob purchases the property subject to the mortgage. The value of the property declines and there is a default on the mortgage. When First Bank forecloses, the property sells for only $30,000.
a. Can First Bank recover the $20,000 balance from Bob? Explain.
b. Can First Bank recover the $20,000 from Ann? Explain.
c. What rights does Bob have during and after the foreclosure?
_{No, Bob purchased the property "subject to" the mortgage. This means that the}

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Definitions:

Liberalism

A political and moral philosophy based on liberty, consent of the governed, and equality before the law, emphasizing individual rights, democracy, and free markets.

Limited Government

A governing philosophy where governmental power is restricted by law, often in order to protect citizens' freedoms and rights.

Direct Relief Payments

Money given directly from the government to individuals or families in need, without intermediaries, often aimed at reducing poverty or providing emergency assistance.

New Deal Philosophy

The set of government policies introduced by President Franklin D. Roosevelt in the 1930s to recover from the Great Depression.