Phillip Owns a Home in Fee Simple,which He Subsequently Mortgages

question 134

Essay

Phillip owns a home in fee simple,which he subsequently mortgages for $150,000 to the Empire Bank.Two years later Phillip decides to move to another city and sells the property to Carl,who assumes the mortgage to the Empire Bank.Carl is later laid off from work,and runs into serious financial difficulties,resulting in the mortgage going into default.Describe the options open to the Empire Bank with respect to each of the parties,and follow these options through to their natural conclusion.Speculate as to any mechanisms that may commonly be put in place for greater certainty between the parties on the assumption of a mortgage.

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Definitions:

Subjective Distress

Personal feelings of pain, discomfort, or upset, often related to psychological states.

Emotional Difficulties

Challenges in managing emotions leading to distress in social, occupational, or other important areas of functioning.

Adolescence

The transitional stage of physical and psychological development that generally occurs during the period from puberty to legal adulthood.

Identity Foreclosure

A concept in psychology referring to the premature commitment to an identity without adequate exploration of other options or self-exploration.