Mortgages

Question 1

A mortgage is a legal _______ granted to a ______ by a landowner in return for the loan of money and giving the lender rights to ____ the land if the loan isn’t repaid

Answer 1

charge, lender, sell

Question 2

What is another name for the mortgagee?

Answer 2

Lender

Question 3

What is another name for the mortgagor?

Answer 3

Borrower

Question 4

How must a legal mortgage be made?

Answer 4

By deed

Question 5

What are 2 situations in which an equitable mortgage may be created?

Answer 5

1. Mortgage states its to take effect in equity only
2. No/defective mortgage deed but the mortgage is in a signed contract

Question 6

Must legal mortgages of registered land be registered?

Answer 6

Yes

Question 7

How are equitable mortgages on registered land protected?

Answer 7

Placing it on a notice/restriction on property’s register of title

Question 8

For unregistered land, if title is unregistered, the first legal mortgage is protected by the _________ __ _____ ______ with the mortgagee

Answer 8

deposit of title deeds

Question 9

For unregistered land, a second legal mortgage is protected by registration of a __ _______ mortgage against the mortgagor’s name

Answer 9

C(i) puisne

Question 10

For unregistered land, an equitable mortgage is protected by registration of a ____ ________ _______ ________ against the mortgagor’s name

Answer 10

C(iii) general equitable charge

Question 11

What are the 5 third-party interests that will be superior to the buyer of a mortgaged property if the property is sold due to default?

(clue: ELLIE)

Answer 11

1. Legal tenancy of unregistered land granted before creation of mortgage
2. Legal tenancy of registered land that doesn’t exceed 7 years
3. Equitable tenancy of unregistered land which has been protected as a C (iv) estate contract
4. Equitable tenancy of registered land that doesn’t exceed 7 years and tenant is in occupation
5. Interest of occupier who contributed to purchase price

Question 12

For a legal mortgage, what 4 rights does a mortgagee have upon default of the mortgage obligation?

Answer 12

1. Sue for debt
2. Take possession
3. Foreclosure
4. Sell the mortgaged property

Question 13

What is foreclosure and when does it arise?

Answer 13

A court order that transfers the legal estate from the borrower to the lender

It arises after the contractual date for repayment has passed

Question 14

A lender has the power to sell the mortgaged property without applying to court if it was created by a _____ and the date for ________ of the mortgage has passed, which is usually _ ______ after the creation of the mortgage

Answer 14

deed, redemption, 6 months

Question 15

The power to sell only becomes exercisable if which of any 3 conditions are satisfied?

Answer 15

1. Interest payments more than 2 months in arrears; or
2. Written request for repayment of capital and more than 3 months have passed
3. Breach of other mortgage term

Question 16

A sale by a mortgagee under a power of sale is subject to any _____ mortgages but will be free of any estates or _______ over which the mortgage itself has _________

Answer 16

prior, interests, priority

Question 17

A ________ mortgage generally has ________ over all subsequent mortgages

Answer 17

legal, priority

Question 18

What is the general rule for priority for equitable mortgages (or any equitable interest)

Answer 18

The first in time takes priority