Chapter 15- Introduction To Mortgage Law Flashcards
Legally, what is a mortgage?
A grant in the estate of land to the lender as a security for a loan made by the lender. ( A promise for the borrower (Mortgagor) to repay the debt)
What is a Duplicate Certificate?
A document that can create an equitable mortgage that is handed over to the lender as security for the loan.
Explain “there shall be no clog on the equity of a mortgage”
A Clog prevents the borrower from being able to redeem his or her legal title free and clear of all charges upon repayment of loan * to know if it is a clog or not - think about someone winning the lotto, if they couldn’t pay their mortgage off tomorrow, there is a clog*
Who is the “mortgagee”
The Lender
Who is the “mortgagor”
The Borrower
What is required if a lender has modified any terms contained in a set of standard mortgage terms
The borrower must receive at or before the time of the mortgage is signed by the borrower an exact copy of the standard terms together with any modified terms included in the document
Explain “Acceleration Clause”
A clause allowing the lender, upon borrowers payment default, to demand payment in full of the O.S.B
What is a “Fixture”
All heating, refrigeration, gas, electrical, plumbing equipment, wall to wall carpet, awnings, and blinds comprised to the freehold whether or not attached to the land
Describe “ Reverse Annuity Mortgage”
A reverse mortgage- Paid back by the sale of the house when the borrower passes away
Explain Bridge Financing
A type of interim financing whereby a borrower will receive a loan and grant a mortgage to a lender for a short period of time while for long term financing to be approved
What is the rate allowed by law if no rate is set out Under section 3 of the interest act
5% per annum
What criteria must be made fo a borrower to tender a prepayment?
- ) The borrower is an individual
- ) The mortgage provides that it is not payable until a time more than five ears from the date of the mortgage
- ) The expiration of the 5 years from the date of the mortgage has occurred
An interest rate over ___% is considered illegal
60%
What are two ways a lender can become responsible for the contamination of a site?
- ) where they exercise control over or impose requirements which cause a site to be contaminated
- ) When lenders become the reregistered owner of a contaminated property - Example, foreclosures
If the fourth mortgage lender obtains an order absolute what happens?
The mortgage lender becomes the fee simple owner and owes the 1st, 2nd, and 3rd lenders
What is the most common way for a first mortgage to keep its priority
By receiving a Priority or Postponement agreement from the second mortgage
How many days does a mortgagee have to wait to enforce security against the insolvent person?
10 days from the date they provide notice
If a borrower is a farmer, how many days must a mortgagee wait to enforce security from giving notice?
15 days as per the farm debt mediation act
If a home is foreclosed that has tenants living in it, how long do they have to vacate?
Immediately once he court orders a vacant possession - regardless of rental agreement lease end date
Define” A final order of the court in the foreclosed process which may not be challenged except by way of the appeal
Order Nisi
If an order nisi has been filed, can the owner who owes the money still attempt to sell their property
Yes, the borrower is free to list without judicial supervision
How can a lender obtain an order for conduct of sale
By proving that the property is worth less than what is owed
