s8 Mortgages

Question 1

what is a mortgage?

Answer 1

is a form of security interest, which result in a proprietary title being granted to the lander for the purpose of securing repayment for the debt.

Question 2

forms of mortgages?

Answer 2

two forms:

1. Old title Mortgage - involves transfer of ownership to the mortgagee/lender along with the contract to re transfer land when debt discharged.
2. Torrens Title and Equitable Mortgages- involves a charge in favour of the mortgagee for the duration of the loan

Question 3

what are the rights and duties arising under mortgage, for mortgagor?

Answer 3

Equity of Redemption:
A mortgagor has an equity right to redeem (save) the legal title of a land, whenever a secured loan contract amounts to a mortgage. However, the mortgagor has a duty to comply with the terms of the contract, and do not violate the mortgagee’s rights.
For instance, If a mortgagor does not follow the contractual term of repaying the loan, then there is no contractual right to redeem. But only a right to damages.

Question 4

what is the equity of redemption?

Answer 4

refers to a mortgagor’s right to redeem/protect his legal interest over a land and prevent a mortgagee from proceeding on a foreclosure over the land/property, till the end of loan repayment.

Question 5

who is a Mortgagee?

Answer 5

the person/bank who lends the money

Question 6

what are the rights and duties arising under mortgage, for mortgagee?

Answer 6

A mortgagee has a security interest, and acquires a range of rights in order to reinforce the proprietary status of the mortgage such as;

• the promise to pay
• the right to possession
• the right to appoint receivers
• the power to sale
• the right of foreclosure

Question 7

what is foreclosure ?

Answer 7

Foreclosure occurs when a lender takes possession of a property after the mortgage holder fails to make repayments on a home loan. The sale of the property is to help the lender regain the cost of the outstanding loan.

Question 8

Does Equity of Redemption falls under contractual right?

Answer 8

No, it falls under proprietary right because this right has been uphaold through an equitable interest.

Question 9

Formality Requirement to create a mortgage?

Answer 9

both a mortgage contract

Question 10

where does the rights of the parties to a mortgage arise from?

Answer 10

from the term of the loan contract and any relevant or statutory provision

Question 11

the nature and scope of a mortgage will depend on two issues?

Answer 11

1. the sources of law that validates it - that’s whether the mortgage security arises under statute, common law or equity
2. the nature of property right that is subject to the security