Randall Initially Owned a Piece of Land Called Blackacre That

question 51

Multiple Choice

Randall initially owned a piece of land called Blackacre that was worth $400 000. He borrowed $200 000 from Keir and created a mortgage over Blackacre in favour of Keir. Randall then borrowed $100 000 from Ian and created a mortgage over Blackacre in favour of Ian. Randall has not repaid any part of either debt. Because of a recession, the value of Blackacre has dropped to $90

• A) Although Ian holds the equity of redemption, it probably will not help him in the long run.
• B) If Blackacre is sold for $90 000 because Randall is in default under the mortgages, Keir will receive $60 000 and Ian will receive $30 000, because Randall owes Keir twice as much as Ian.
• C) Depending upon the facts, Keir may be treated as the initial mortgagor and Ian may be treated as the subsequent mortgagor.
• D) By granting two mortgages over the same property, Randall has committed mortgage fraud.
• E) It is possible that Ian will be treated as the initial mortgagee and that Keir will be treated as the subsequent mortgagee.

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Definitions:

San Vitale

A church in Ravenna, Italy, known for its remarkable early Christian Byzantine art and mosaics.

Choir Wall

The architectural element that separates the choir, the area where the altar is located, from the nave or main body of the church, often found in Christian churches.

Socially Efficient

A condition where resources are allocated in a way that benefits society as a whole and maximizes overall welfare.

Marginal Cost

Marginal cost is the change in total cost that arises when the quantity produced is increased by one unit; it is the cost of producing one additional unit of a product.