MORTGAGES

Question 1

DEFINITION

Answer 1

• a mortgage is an interest in property
• granted but mortgager to mortgagee as security forces repayment of a debt with a provision for redemption
• included in the definition of conveyance s.205 LPA
• mortgagor borrower
• mortgagee lender
• is a hybrid between a contract between the two and carries proprietary rights (Bristol airport plc v powdrill 90)

Question 2

TERMINOLOGY

Answer 2

• redemption: process of freeing property from a mortgage by repayment of debt
• repossession: the right of the mortgagee to obtain vacant possession of the property
• possession order: an order obtained by the mortgagee to gain actual control of the property with an intention to use it as their own

Question 3

CREATION

Answer 3

• post 2002 LRA 02 only way to create a mortgage is a charge by deed by way of legal mortgage s87 LPA

FORMALITIES:

• legal interest s1 (2) LPA
• a deed s52 LPA
• registration at the land registry if borrowers title to land is registered s27 LRA (charges register) + s43 LRA (proprietorship register)
• registration at the land registry if it is a first mortgage of an unregistered title (triggers first registration)

Question 4

PROVISIONS

Answer 4

• repayment of loan
• covenants by the mortgagor relating to property eg maintenance, insurance, leasing
• rights and remedies Of the mortgage

Question 5

BASIC RIGHTS & POWERS OF MORTGAGOR

Answer 5

• 1) no ‘clog or fetter’ on the mortgagors equity of redemption (can not impede mortgagor paying back mortgage) fairclough v swan brewery co
• 2) borrowers right to redeem the mortgage must not be limited or excluded
• 3) the court in equitable jurisdiction will strike down oppressive and unconscionable terms multi service bookbinding Ltd v marden
• 4) the court may reopen extortionate credit bargains ss19-20 consumer credit act 2006

Question 6

BASIC RIGHTS & POWERS OF MORTGAGOR II

Answer 6

• 5) collateral advantages are valid only if they cease on redemption and are not unfair, unconscionable, or in restraint of trade kreglinger v new patagonia meat
• 6) can void financial transactions on grounds of misrepresentation made by one to another and court through equity can set aside or decline to enforce a transaction induced by undue influence
• 7) financial services and markets act 2000
• 8) powers provided by s91, 98 & 99 LPA 25