Problem
A. "McCorriston purchased rental real estate in a lien-theory state. The purchase was secured by a mortgage loan from the First Bank of Crooksville. When McCorriston defaulted, the bank attempted to collect the rents from the property to be applied against the loan. The mortgage did not contain a provision allowing it to do so. However, the bank argued that because McCorriston had defaulted, it was entitled to the rents. Was the bank correct? Support your answer."
B. "Oellerich and his wife sold real estate that they owned. The purchasers assumed the mortgage. The assumption agreement provided that the Oellerichs were not released from liability on the original debt if the purchasers defaulted on the note. Shortly thereafter the lender and purchasers executed a modification agreement that increased the interest on the note. The Oellerichs were not parties to this agreement. Did the modification agreement affect the rights of the parties? Explain how and why."
C. "Smith agreed to purchase property from Layton. As part of the contract, Smith assumed and agreed to pay the existing mortgage. Smith immediately contracted to sell the property to Young. Layton agreed to convey directly to Young, who assumed the mortgage in the deed to him. Smith never had title to the property. The mortgage was not paid, and the foreclosure took place. There was a deficiency, and the mortgagee sued Smith. Would the mortgagee be successful? Discuss.