Mortgages Flashcards
What kind of interest is a mortgage?
Proprietary
Which register does a mortgage appear on and how?
As a notice on the Charges register
What’s required for a mortgage to be legal?
A deed (otherwise can only be equitable)
Priority of mortgages:
1st to appear on register takes priority (date of creation irrelevant)
Whoever registered first sells free of any mortgage registered later!
Whats required for a mortgage over an equitable interest?
Must be in writing + signed
Lender’s remedies for legal mortgage
- possession
- power of sale
- debt action
- appointment of receiver
- foreclosure
When can the lender take possession without the court’s order?
If it wouldn’t involve threatening violence (so, only if property is empty)
Buyer can ask court to adjourn proceedings/delay execution of possession order if:
A. lender started possession proceedings,
B. property is a dwelling house,
C. buyer is likely to pay arrears within a reasonable period (remaining period of mortgage)
To exercise the power of sale, it must:
A. exist,
B. have arisen (date of redemption passed), and
C. become exercisable
Power of sale becomes exercisable when:
- lender gave notice for repayment, and buyer failed to do it within 3 months,
- interest in arrears for 2 months,
- buyer breached mortgage term
What is “equity of redemption”?
If the lender sells the property for more than the debt owed, balance must be paid to the debtor
Hierarchy for distributing proceeds of sale:
- cost of paying off mortgages with priority
- lender’s expenses of sale
- lender’s mortgage,
- balance to those entitled to equity of redemption
When can a debt action be brought?
Once the date for redemption has passed
Debt recovery is limited to:
- 6 years for interest,
- 12 years for capital
When can a receiver be appointed?
When the right exists, has arisen, and is exercisable
How is a receiver appointed?
Chosen by lender
Appointed in writing
When + where should lender apply for foreclosure?
To the High Court, after the date for redemption passed
2 stages of foreclosure process
- foreclosure nisi (gives 6 months to pay debt)
- foreclosure absolute (property title vests in lender)
Does the borrower have equity of redemption in foreclosure?
No
If sold for more than debt, borrower does not get remainder
