CHAPTER 4.03. Consideration

• Jurisdiction: United States

4.03. Consideration

Although a mortgage must secure a debt in order to be enforceable, that is not the same as consideration. Traditionally, consideration was not viewed to be necessary for a mortgage to be enforceable.¹⁵ Accordingly, a mortgage can perhaps secure a pre-existing obligation.¹⁶ More recently, courts have found consideration to exist in the obligations secured by the mortgage.¹⁷ Accordingly, whether consideration is necessary seems a distinction without a difference.

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Notes:

^[15] 5 Tiffany on Real Property § 1401, at 276 (1939).

^[16] Id. at 277. But see Ferris v. Chic-Mint Gum Co., 124 A. 577 (Del. Ch. 1924). However, generally "dragnet clauses" are not favored. See generally Annotation, 3 ALR 4th 690; M. Madison, J. Dwyer & S. Bender, The Law of Real Estate Financing §§ 5.92, 5.93 (2018).

^[17] 5 Tiffany on Real Property § 1401, at 277 (1939).