Mortgages Flashcards
what is a mortgagee and mortgager?
lender is the mortgagee who loans money to fund the property purchase.
the borrower is the mortgager who grants rights over the property as security for the laon.
is a mortgage a proprietary right?
YES
it must be created by a deed that is registered at the land registry.
can a mortgage be an equitable interest?
yes, if it is in writing and signed by the grantor and the borrower holds an equitable interest in the land.
how to discharge a mortgage?
when it has been repaid in full.
what are the 4 limbs of equity of redemption?
- equitable right to redeem supplements legal right to redeem.
- no postponement or prevention of redemption.
- no collateral advantages.
- no unconscionable terms.
postpone of the right to redeem rules?
right to redeem- date is the first day on which the loan can be repaid.
right to redeem caluses are assessed as a question of fact and degree.
can only be postponed if the borrower gains some benefit from any lock in and gets back exactly what was mortgaged.
options to purchase the property will be void unless they are genuinely part of an independent transaction.
what are collateral advantages?
if a lender tries to extract additional value from the borrower, the offending term in the mortgage deed may be struck out as being contrary to the equity of redemption.
e.g solus tie (to do with beer) but these are usually upheld if they end within the mortgage term.
what are unconscionable terms?
more than simply unfair or unreasonable. e.g extremely high interest rates.
TEST- HAS THE TERM BEEN IMPPOSED IN A MORALLY REPREHENSIBLE MANNER?
the principles of constructive notice of undue influence have been extended to which cases?
relevant in every case where the relationship between the person claiming the undue influence and the debtor is non-commercial.
how are registered legal charges prioritised?
depends on the order in which they are entered on the register.
can equitable mortgages take priority over legal ones?
yes if protected by an entry of notice on the charges register, it will take priority over a subsequent legal mortgage.
can lenders expressly agree themselves an order of priority?
YES
what are the five courses of action a legal lender has?
- debt action- personal action, deadline for recovery of the capital is 12 years.
- possession- last resort.
- sale.
- receiver- continues a business of land to get money.
- foreclosure- RARE
what is the strongest right a lender has against a defaulting borrower?
SALE- sale proceeds are applied towards the outstanding debt/
- power of sale must arise in accordance wwith statutory rules.
- must be exercisable in accordance with statutory rules.
3. lender must fulfil its duties on sale which have largely arisen from case law.
what are the four limits on the right to possession?
- Criminal law act- criminal offence to use or threaten violence for the purpose of gaining entry to property.
- pre action protocol- residential property.
- statutory duty to postone the date of delivery of possession if borrower is likely to be able to pay the sums due within a reasonable period (before the end of the mortgage term)
does a lender’s right to sell exist?
yes is either expressly provided for in implied within LPA 1925.
when does a lenders rightt o sell arise?
when the mortgage money has become due.
if an interest only mortgage- it is the legal redemption date which is usually around 6 months from start of mortgage.
when is the right to sell exercisable?
- notice requirement payment of the whole loan has been served and the borrower has defaulted.
- interest is unpaid and arrears for at least 2 months.
- breach of mortgage provision.
