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Land Law > Mortgage > Flashcards

Mortgage Flashcards

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1
Q

Mortgagee

A

Lender

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2
Q

Mortgagor

A

Borrower

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3
Q

Is mortgage legal or equitable

A

Legal so made by deed

But if no deed then equitable

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4
Q

What remedies are avaliable to lenders

A 
Possession 
Power of sale
Debt action 
Appoint receiver 
Foreclosure
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5
Q

What determines which remedy a lender can use

A

The lender can choose but must avoid a cause of action that would substantially increase burden to borrower

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6
Q

Which remedies bring mortgage to an end

A

Sale and foreclosure

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7
Q

Can lender threaten or use violence to obtain possession

A

No

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8
Q

When does lender have power of possession.

A

Immediately. No need to default

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9
Q

Is a court order needed to take possession

A

Not if empty or directing them to pay rent to lender.

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10
Q

Does lender need to comply with pre action protocol go get possession

A

Only if property is residential

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11
Q

When can borrower can the court to adjourn or postpone possession.

A

If it is a dwelling house and they’re like likely to pay in reasonable time
Reasonable time can be full remaining period of mortgage

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12
Q

When can the power of sale be used

A

When it exists, has arisen and has become exercisable

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13
Q

When has the power of sale arisen

A

Redemption date has passed or first instalment due

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14
Q

When does power of sale exist

A

Expressed in mortgage deed or implied into every legal mortgage if not excluded by deed

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15
Q

When is power of sale exercisable

A

Either:
In deed
Request full amount repaid and hasn’t paid in 3 months
Interest arrears of 2 months
Or
Borrower breached a term of the mortgage other than to pay rent or interest

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16
Q

What does buyer need to check if buying a house from a lender exercising their power of sale

A

Check power of sale exists and has arisen

17
Q

Lenders duty when selling

A

Act in good faith (advertise properly etc)

Reasonable care to get market value

18
Q

Does lender have to delay sale to get higher proce

A

No just market price on day of sale

19
Q

What if lender fails to obtain market value

A

Account to all with equity in redemption
But has met duty if advertised properly
Borrower must prove lender didn’t meet duty

20
Q

What is the lenders strict duty to account

A

Where properly produces income lender can use income to pay debt but account to borrower for any excess and manage with due Dilligence or account to borrower for difference

21
Q

What interests does the buyer take free from

A

All lesser mortgages but not superior mortgages

22
Q

How to distribute funds on sale

A

Prior mortgages
Costs of sale
Own mortgage
Equity of redemption

23
Q

When can debt action be taken

A

When legal date of redemption has passed

24
Q

Limitation period for a debt action

A

12 years for capital

6 years for interest

25
Q

What if the proceeds of sale aren’t enough to cover debt

A

Can also use debt action for the remaining amount

26
Q

When would appointing a receiver be a good idea

A

When property is producing income

27
Q

When can a receiver be appointed

A

When power exists, has arisen and has become exercisable

28
Q

How to appoint recover

A

In writing

29
Q

Who chooses the receiver

A

Lender

30
Q

Can a receiver sell the property

A

Only if the terms of the mortgage allow it

31
Q

Who is the receiver accountable to

And who is responsible for the receiver

A

The borrower

32
Q

How is income obtained by a receiver applied

A 
Outgoings of property
Interest of prior mortgage 
Costs of property and receiver 
Interest of mortgage 
Capital on mortgage 
Balance to borrower
33
Q

If interests of lender and borrower conflict whose should the recover prioritise

A

The lender

34
Q

Duties of receiver to the borrower and others with equity of redemption

A

Ensure no conflict of interest
Act with good faith
Act with reasonable competence
Reasonable care to obtain market value if power to sell
May, but not obliged to, take steps to increase value of property

35
Q

When is foreclosure avaliable

A

When legal date for redemption has passed

36
Q

2 steps in foreclosure

A

Foreclosure nisi- prepare accounts to show what is owed followed by 6 month period to pay
Foreclosure absolute - vest title in lender. Extinguish equity of redemption held by borrower

37
Q

Ways borrower is protected from foreclosure

A

Court has discretion to reopen proceedings
If dwelling house can seek adjournment
Apply for judicial sale instead to preserve equity of redemption

38
Q

Who can apply for judicial sale instead of foreclosure

A

Anyone with interest in equity of redemption

39
Q

What if the property is worth more or less then debt following foreclosure

A

Buyer is free from liability. doesn’t get any extra but won’t owe any extra either

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