Mortgages Part One Flashcards
What is a mortgage?
A mortgage is a legal agreement in which property is used as security for the repayment of a loan.
Who is the mortgagor and who is the mortgagee?
Mortgagor = borrower; Mortgagee = lender.
What is the ‘equity of redemption’?
The total of the mortgagor’s rights in the property, including the right to redeem the mortgage.
How did mortgages work at common law?
The lender acquired legal title to the property until the debt was repaid; borrower lost all rights after the redemption date.
What did equity change about common law mortgages?
Equity allowed redemption even after the legal date and treated the borrower as the owner, introducing the concept of ‘equity of redemption’.
What is the difference between the right to redeem and the equity of redemption?
The right to redeem is the right to reclaim property after debt repayment; equity of redemption is the broader interest in the property retained by the mortgagor.
How is a legal mortgage created over registered land post-2009?
By creating a charge by deed, per Section 89 of the 2009 Act.
What did Section 62 of the Registration of Title Act 1964 allow?
Registered owners could create a charge (i.e., a mortgage) on their land, which gives the lender mortgagee rights.
What happens when a charge is registered?
It operates as a mortgage by deed and gives the lender all the rights of a mortgagee, including the power of sale.
How can equitable mortgages be created over registered land?
By deposit of land/charge certificates, by agreement enforceable in equity, or by estoppel, as in First National Bank plc v Thompson.
What are the two methods of creating legal mortgages over unregistered land?
Conveyance of fee simple or leasehold interest; By demise or sub-demise (granting a lease/sublease as security).
What changed post-2009?
All legal mortgages (including for unregistered land) must be created by charge by deed.
How can equitable mortgages be created for unregistered land?
Mortgage of an equitable interest; Agreement to create a legal mortgage; Deposit of title deeds.
What is the significance of Russel v Russel (1783)?
Established that depositing title deeds with the intent of securing a loan creates an equitable mortgage.
Why is deposit of title deeds risky?
Because there’s often no written record; courts may not enforce it unless intention to create security is clear.
What are three other types of security besides mortgages?
Pledge – Transfer of possession as security; Lien – Right to retain possession until debt is paid; Lis pendens – Legal notice of pending litigation involving the property.
