|DRAFT CSC, Title 24. Land Management|
§ 1701. Purpose.
§ 1702. Effect of enactment of this
§ 1703. Definitions.
§ 1704. Right to possession.
§ 1705. Security not to be impaired.
§ 1706. Property mortgageable.
§ 1707. Heirs and devisees take subject to mortgage.
§ 1708. Transfers made as security deemed mortgages.
§ 1709. Necessity of writing; Acknowledgment.
§ 1710. Requisites for recording.
§ 1711. Effect of failure to record.
§ 1712. Instruments made with intent to defraud.
§ 1713. Service of notice; Designated personal representative.
§ 1714. Assignments, subordinations, and waivers.
§ 1715. Record of assignment not notice to mortgagor; Form of notice to mortgagor.
§ 1716. Assignment of debt carries security.
§ 1717. Certificate of discharge required.
§ 1718. Waiver by borrower of statutory rights; Validity.
§ 1719. No private power of sale conferred by mortgagee.
§ 1720. Acceleration of principal.
§ 1721. Mortgagee's remedies in the event of default.
§ 1722. Notice of default.
§ 1723. Request for copies of notices of default prior to foreclosure.
§ 1724. Cure of default; Payment of arrearages; Costs and fees; Effect upon acceleration.
§ 1725. Actions for the foreclosure of mortgages.
§ 1726. Discharge of real estate mortgage not renewed or extended or recorded.
§ 1727. Legal tender.
§ 1728. Foreign citizens as mortgagees.
§ 1729. Improvements by mortgagee prior to sale.
The purpose of this
Source: TSL 4-91, § 1, modified.
Editor's note: TSL 4-91 that created this Chapter was signed into law by the Governor on November 10, 1981.
In the event of conflict between the provisions of this
Source: TSL 4-91, § 2, as amended by TSL 6-45, § 1, modified.
As used in this
(1) "Default" is a failure of an obligor to perform an act he is bound to perform.
(2) "Encumbrance" is a non-fee interest in or charge upon real property.
(3) "Improvement" is any building or structure constructed, or any artificial condition maintained, upon real property.
(4) "Lien" is a charge imposed on some mode upon specific property by which it is made the security for the performance of an act.
(5) "Mortgage" is a contract in which real property is made the security for the performance of an act, usually the payment of a debt without the transfer of title.
(6) "Mortgagee" is one that takes or receives a mortgage. This term shall also, where appropriate refer to the mortgagee's heirs, personal representative, successors, and assigns.
(7) "Mortgagor" is one who having all or some part of title to property, by written instrument pledges that property as security for a debt. This term shall also where appropriate refer to the mortgagor's heirs, personal representative, successors, and assigns.
(8) "Property" means any interest in real property which is capable of being transferred.
Source: TSL 4-91, § 3.
Editor's note: Definitions put into alphabetical order and renumbered where appropriate.
The mortgagee is not entitled to possession of a mortgaged property unless the mortgage expressly grants a right of possession. However, after the execution of a mortgage, the mortgagor may agree to deliver possession to the mortgagee without additional consideration.
Source: TSL 4-91, § 4.
No mortgagor shall do any act which will impair the mortgagee's security without the express written permission of the mortgagee.
Source: TSL 4-91, § 5.
Any property may be mortgaged including homestead property for which a deed of conveyance has been issued pursuant to Title 67 of the Trust Territory Code, and properly recorded. The exemption set forth in 8 TTC 61(3) shall not be applicable to any property which is mortgaged and properly recorded.
Source: TSL 4-91, § 6.
Whenever real property which is subject to a mortgage passes by secession or devise, the successor or devisee is not entitled to have the decedent's personal representative satisfy the mortgage out of the decedent's estate unless there is an express provision in the decedent's will that his estate is to satisfy the mortgage. Unless the mortgage is so satisfied out of the decedent's estate, the heir or devisee takes the property subject to the mortgage.
Source: TSL 4-91, § 7.
Every transfer or an interest in property, made only as a security for the performance of another act, and every transfer or conveyance of any property be it a deed or trust or otherwise, executed and delivered to secure performance of another act, shall be deemed a mortgage.
Source: TSL 4-91, § 8.
A mortgage shall be created, amended, renewed, or extended only by writing in English and in
(1) That the English document shall be the sole operative version. An error or errors in the translated version shall not affect the legal relationship between the parties unless it is proved that the error was willfully or recklessly caused by the party to be charged; and
(2) That the mortgage is a binding legal instrument and that it is recommended that the mortgagor have the instrument reviewed by an attorney.
Source: TSL 4-91, § 9.
(1) No mortgage shall be received for recordation unless it is executed in accordance with the requirements of Section 1709 and 1710 hereof and contains:
(a) post office addresses of the mortgagor and mortgagee;
(b) the legal description of the real property affected;
(c) principal amount of the secured indebtedness;
(d) rate of interest thereon;
(e) the time and place of repayment, and maturity date.
(2) All mortgages, amendments, renewals, and extensions or mortgages shall be acknowledged or proved, as provided in this
Source: TSL 4-91, § 10, modified.
In the event of failure to properly record a mortgage the provisions of 57 TTC Section 202 shall apply.
Source: TSL 4-91, § 11.
Any instrument affecting an estate in real property, including every charge upon real property, or upon its rents or profits, made with intent to defraud prior or subsequent purchasers thereof, or encumbrances thereon is hereby declared to void as against every purchaser or encumbrancer for value, of the same property or the rent or profits thereof.
Source: TSL 4-91, § 12.
(1) All notices required by this
(2) The name and address of the designated personal representative may be changed from time to time upon the request of the mortgagor, by an amendment to the mortgage.
(3) A United States Postal Service Registry Return Receipt showing that the envelope containing the notice has been received by the mortgagor, or his designated personal representative shall be prima facie evidence that proper notice has been given. A return by a police officer,
(4) When service cannot be made in accordance with the provisions of Subsection (3) of this Section, the notice shall be filed with the Clerk of Courts who shall cause the notice to be announced on radio within the State at least once per week for four
(5) In the event there is more than one mortgagor, proper notice served upon any one shall constitute service upon all of said mortgagors.
Source: TSL 4-91, § 13, modified.
Nothing in this
Source: TSL 4-91, § 14, modified.
When a mortgage is executed as security for money due or to become due on a promissory note, bond, or other instrument, the recordation of the assignment of the mortgage is not of itself sufficient notice to the mortgagor, so as to invalidate any payment made by the mortgagor, to the person holding such note, bond, or other instrument. At the time of the assignment, a notice shall be served upon the mortgagor pursuant to the provisions of Section 1713 of this
"Your promissory note and mortgage of (date) to (payee-mortgagee) has been assigned to (assignee) . All payments shall hereafter be made to (assignee) at (assignee's address) ."
Source: TSL 4-91, § 15, modified.
The assignment of a debt secured by a mortgage carries with it the mortgage unless the assignment provides to the contrary.
Source: TSL 4-91, § 16.
When any mortgage has been satisfied, the mortgagee must execute, acknowledge, and deliver to the mortgagor a certificate of the discharge thereof, so as to entitle such certificate to be recorded. Any mortgagee, who after demand by the mortgagor, for a period of 30
Source: TSL 4-91, § 17.
Any express agreement made or entered into by a borrower at the time of or in connection with the making or renewing of any loan secured by a mortgage or other instrument creating a lien on property, whereby the borrower agrees to waive the rights or privileges conferred upon him by this
Source: TSL 4-91, § 18, modified.
No mortgage may be foreclosed other than by the judicial remedies provided by this
Source: TSL 4-91, § 19, as amended by TSL 6-45, § 2, modified.
Cross-reference: The Deed of Trust Act of 1988 (TSL 6-46) is codified in Chapter 17 of this title.
No acceleration of unpaid principal of the underlying obligation shall be effective until 30
Source: TSL 4-91, § 20, modified.
In the event of default by the mortgagor in the performance of his obligations under the mortgage or note or any other instrument secured by the mortgage, the mortgagee may elect to do any or all of the following:
(1) Commence an action for specific performance or injunctive relief, or a common count or counts for payment of money by the mortgagor, guarantor, or other parties obligated thereunder. In the event that the judgment rendered in such action orders full performance of the mortgagor's entire obligation, or payment of the entire sum for which the mortgagor is indebted, satisfaction by the mortgagor of the judg
(2) The mortgagee may, if so empowered by the terms of the note or mortgage, bring an action to foreclose or satisfy the mortgage in accordance with the provisions of this
Source: TSL 4-91, § 21, modified.
Not less than 30
(1) a description of the real property;
(2) the date and amount of the mortgage;
(3) the amount due for principal and interest, separately stated; and
(4) a statement that if the amount due is not paid within 30
Source: TSL 4-91, § 22, modified.
(1) Request; Recording; Contents; Form. Any person desiring to receive a copy of a notice of default prior to foreclosure may, at any time subsequent to recordation of such mortgage and prior to service of default as provided under Section 1713 of this Chapter
"In accordance with Section 1723 of the
(2) Clerk of court's duties. Upon filing for recording such request, the Clerk of Courts shall index with the mortgage, the names of persons requesting copies.
(3) Mailing notice. The mortgagee shall within ten (
Source: TSL 4-91, § 23, modified.
Whenever there has been a failure by the mortgagor to pay obligations in accordance with the terms of a mortgage, including circumstances when all or a portion of the principal sum secured by the mortgage has, prior to the fixed maturity date become due or been declared due by reason of his default, the mortgagor or his successor in interest in the mortgaged property or any part thereof, or any other person having a subordinate lien or encumbrance therein may at any time prior to the foreclosure sale, pay to the mortgagee or successor in interest, the entire amount then due under the terms of such mortgage, and reasonable attorney's fees actually incurred, but if the complaint for foreclosure has not yet been filed, then such attorneys fees shall not exceed three hundred dollars ($300.00), or one-half of one percent of the entire unpaid principal sum secured (whichever is greater), other than such portion of principal as would not then be due had no default occurred. Such payment shall cure the default, and all proceedings therefore instituted shall be dismissed or discontinued. The obligations and mortgage shall then be reinstated and remain in full force and effect as if no default occurred, provided, however, that such payment shall not prevent a valid acceleration of the principal due if a previous valid acceleration of principal caused by a prior default of the mortgagor, which resulted in a filing of complaint in foreclosure, by a mortgagee, had been canceled by virtue of a payment made pursuant to the terms of this Section.
Source: TSL 4-91, § 24.
(1) Actions for the foreclosure of mortgages; where brought. All judicial actions for the foreclosure of a mortgage shall be brought in the Trial Division of the
(2) Service of summons. Service of summons in an action of foreclosure shall be made in accordance with the applicable provisions of
(3) Complaint in an action for foreclosure of a mortgage. The complaint for foreclosure shall set forth the date and the due execution of the mortgage; its assignments, if any; the name and residence of the mortgagor; a description of the mortgaged property; a statement of the date of the note or other obligation secured by the mortgage, and the amount claimed to be unpaid thereon; and the names and residences of all persons having or claiming an interest in the property subordinate in right to that of a holder of the mortgage, all of whom shall be made defendants in the action. No person holding a conveyance from or under the mortgagor of property mortgaged, or having a lien thereon, which conveyance or lien does not appear of record at the time of commencement of the action, need be made a party to such action, and the judgment therein rendered, and the proceedings therein had, shall be conclusive against the party holding such unrecorded conveyance or lien if he had been a part to the action.
(4) Trial and judgment in foreclosure suits. If, upon trial in such action, the court shall find the facts set forth in the complaint to be true, it shall ascertain the amount due to the plaintiff upon the mortgage debt or obligation, including interest, costs, and attorney's fees, and shall render judgment for the sum so found due, and order that the same be paid into the court within a period of three (3) months from and after the date on which the order was made.
(5) Sales of the mortgaged property. When the mortgagor, after being directed to do so, as provided in subsection (4) above, fails to pay the principal, interest, costs, and attorney's fees at the time directed in the order, the court shall order the property (or so much thereof as may be necessary) to be sold; but such sale shall not effect the rights of persons holding prior recorded encumbrances upon the same estate or part thereof. Any sale of property under a judgment of foreclosure shall be made by
(6) Certificate of sale; deed effect. Whenever any real property shall be sold under judgment of foreclosure pursuant to the provisions of this
(7) Application of proceeds. The proceeds of every foreclosure sale must be applied first to the costs of sale, to the costs including attorney's fees adjudged by the court to be due in the judgment of foreclosure, and then to the debt. If there is any surplus, it must be brought to court for the use of the defendant or of the person entitled thereto, subject to the order of the court.
(8) Judgment for balance after sale of property. Upon the sale of any real property, under a decree for a sale to satisfy a mortgage or other encumbrance thereon, if there be a balance due to the plaintiff after applying the proceeds of the sale, the court, upon motion, shall give a decree against the defendant for any such balance for which, by the record of the case, he may be personally liable to the plaintiff, upon which execution may issue immediately if the balance is all due at the time of the rendition of the decree; otherwise the plaintiff shall be entitled to execution at such time as the balance remaining would have become due by the terms of the original contract, which time shall be stated in the decree.
(9) Disposition of proceeds in case the debt is not all due. If the debt which the mortgage secured is not all due, as soon as sufficient property has been sold to pay the amount due, with costs, the sale shall cease; and afterwards, as often as more becomes due for principal or interest, the court may, on motion, order more to be sold. But if the property cannot be sold in portions without injury to the parties, the whole shall be ordered to be sold the first instance, and the entire debt and costs paid, there being a rebate of interest where such rebate is proper.
(10) Vacating sale. Upon motion by an aggrieved party filed within one year of the date of sale, the court may vacate a foreclosure sale and order a new sale upon a finding that there has been fraud in the procurement of the foreclosure decree, where the sale has been improperly, unfairly, or unlawfully conducted, or when the sale is so tainted by fraud that to allow it to stand would be inequitable.
Source: TSL 6-45, § 25, modified.
Every mortgage which has not been renewed or extended or recorded within 15
Source: TSL 6-45, § 26, modified.
Section 1201 of Title 77 of the Trust Territory Code to the contrary notwithstanding, a mortgagee may require all mortgage payments to be made in the coins and currencies of the United States, and all purchases of land at foreclosure sales and all redemption as provided in this
Source: TSL 6-45, § 27, modified.
A non-citizen of the Federated States of Micronesia
Source: TSL 6-45, § 28, modified.
After the commencement of a suit for
Source: TSL 6-45, § 29, modified.