Final answer:
Ms. Johnson can potentially mortgage Blackacre for its current market value of $100,000. However, the actual mortgage amount she can obtain will depend on lender's policies, her creditworthiness, and loan-to-value ratios.
Step-by-step explanation:
The question focuses on how much Ms. Johnson can mortgage the land for, considering its current value and the amount paid on the contract by Mr. Anderson. In real estate transactions, the mortgage value is often determined by the current market value of the property, not just the amount paid thus far on the contract. Assuming that Ms. Johnson has full authority to use the land as collateral, she can potentially mortgage the land based on its current market value, which is $100,000. However, the actual mortgage amount may be less, subject to the lender's policies, Ms. Johnson's creditworthiness, and other standard loan-to-value (LTV) ratio considerations.
By comparison, and for better understanding using similar examples, if Freda wanted to get a mortgage on her house, which is currently valued at $250,000 with no amount owed to the bank, her equity would be the full $250,000, potentially allowing her to mortgage up to that full value.
In Ben's case, where the house value has increased to $160,000 and he has paid off $20,000 of the bank loan, he would have $100,000 in equity. Factors such as these will influence the mortgage amount that Ms. Johnson can be approved for, on her land.