Chapter 15

Question 1

What is another name for the mortgagor?

Answer 1

the borrower

Question 2

mortgagee?

Answer 2

lender

Question 3

TF? BC’s Mortgage Brokers Act contains various prohibitions against theft or fraud related to mortgage transactions.

Answer 3

false. although the mortgage brokers act regulates persons who deal in mortgages within the province, it is the criminal code that contains various prohibitions against theft or fraud related to mortgage transactions.

Question 4

What is an agreement for sale and how is it registered?

Answer 4

An agreement for sale is a contract by which the owner of land (vendor) agrees to sell land to another (purchaser). The vendor grants the purchaser immediate possession of the property in exchange for the purchaser’s promise to pay the purchase price by instalments over a period of time. The purchaser’s interest is registered in the Land Title Office as a charge against the vendor’s certificate of title, and the vendor will remain on the title as the registered owner until the final payment has been made.

Question 5

A foreclosure is what type of legal action?

Answer 5

Foreclosure is a legal action taken by a mortgagee to obtain possession of a property, by reason of the mortgagor’s default in payment of the principal and/or interest of the mortgage debt.

Question 6

The principle that a borrower cannot be prevented by the terms of the mortgage from eventually redeeming his or her property free fro the conditions contained in the mortgage is known as the __ ___ __.

Answer 6

prohibition against clogging

Question 7

TF? An equitable mortgage is the transfer of equity in property as security for a debt. It is always the first mortgage on title.

Answer 7

False. It is the transfer of equity in property as security for debt. An equitable mortgages does not always have to be the first mortgage on title - it can be any mortgage registered on title - it can be any mortgage registered on title

Question 8

A person to whom debt is owed is called a :

Answer 8

creditor

Question 9

What is an acceleration clause?

Answer 9

An acceleration clause is a term in the contract that brings the maturity date of the loan forward if the borrower defaults, so that the OSB is immediately due and payable.

Question 10

Power of ___ is a clause inserted into a mortgage giving the mortgagee the right and power, on ___ in the payment of the debt secured, to advertise and sell the mortgaged property at a public auction, without the necessity of ___.

Answer 10

sale
default
foreclosure

Question 11

A ___ refers to a creditors acceptance of a third party in place of the debtor so that the third party becomes the debtor and the original debtor is released by the creditor from having to pay the debt

Answer 11

novation

Question 12

A mortgage is a document evidencing a debt owed by the __ to the ___. Registration of the mortgage in the __ __ Office transfers the ___’s interest in land to the ___ as security for repayment of debt.

Answer 12

mortgagor 
mortgagee
Land Title Office
Mortgagor's 
Mortgagee

Question 13

What is a vendor take back mortgage?

Answer 13

A mortgage taken back by the vendor from the purchaser to facilitate a sale, whereby the vendor becomes the mortgagee and the purchasee the mortgagor.

Question 14

What is an assumable mortgage?

Answer 14

This mortgage allows a purchaser to assume or take over the responsibilities and liabilities under the mortgage from the vendor.

Question 15

TF? Equity of redemption is the mortgagee’s right to repay the mortgage.

Answer 15

False. Equity of redemption is the mortgagor’s right to repay the mortgage.

Question 16

What is a debtor?

Answer 16

A debtor is someone who owes a debt

Question 17

TF? In a wrap around mortgage, a new mortgagee undertakes the responsibilities as mortgagor under the original mortgage

Answer 17

true

Question 18

What is a guarantor?

Answer 18

someone who becomes contingently or secondarily liable for another’s debt or performance.