Mortgage

Question 1

Mortgagee

Answer 1

Lender

Question 2

Mortgagor

Answer 2

Borrower

Question 3

Is mortgage legal or equitable

Answer 3

Legal so made by deed

But if no deed then equitable

Question 4

What remedies are avaliable to lenders

Answer 4

Possession 
Power of sale
Debt action 
Appoint receiver 
Foreclosure

Question 5

What determines which remedy a lender can use

Answer 5

The lender can choose but must avoid a cause of action that would substantially increase burden to borrower

Question 6

Which remedies bring mortgage to an end

Answer 6

Sale and foreclosure

Question 7

Can lender threaten or use violence to obtain possession

Answer 7

No

Question 8

When does lender have power of possession.

Answer 8

Immediately. No need to default

Question 9

Is a court order needed to take possession

Answer 9

Not if empty or directing them to pay rent to lender.

Question 10

Does lender need to comply with pre action protocol go get possession

Answer 10

Only if property is residential

Question 11

When can borrower can the court to adjourn or postpone possession.

Answer 11

If it is a dwelling house and they’re like likely to pay in reasonable time
Reasonable time can be full remaining period of mortgage

Question 12

When can the power of sale be used

Answer 12

When it exists, has arisen and has become exercisable

Question 13

When has the power of sale arisen

Answer 13

Redemption date has passed or first instalment due

Question 14

When does power of sale exist

Answer 14

Expressed in mortgage deed or implied into every legal mortgage if not excluded by deed

Question 15

When is power of sale exercisable

Answer 15

Either:
In deed
Request full amount repaid and hasn’t paid in 3 months
Interest arrears of 2 months
Or
Borrower breached a term of the mortgage other than to pay rent or interest

Question 16

What does buyer need to check if buying a house from a lender exercising their power of sale

Answer 16

Check power of sale exists and has arisen

Question 17

Lenders duty when selling

Answer 17

Act in good faith (advertise properly etc)

Reasonable care to get market value

Question 18

Does lender have to delay sale to get higher proce

Answer 18

No just market price on day of sale

Question 19

What if lender fails to obtain market value

Answer 19

Account to all with equity in redemption
But has met duty if advertised properly
Borrower must prove lender didn’t meet duty

Question 20

What is the lenders strict duty to account

Answer 20

Where properly produces income lender can use income to pay debt but account to borrower for any excess and manage with due Dilligence or account to borrower for difference

Question 21

What interests does the buyer take free from

Answer 21

All lesser mortgages but not superior mortgages

Question 22

How to distribute funds on sale

Answer 22

Prior mortgages
Costs of sale
Own mortgage
Equity of redemption

Question 23

When can debt action be taken

Answer 23

When legal date of redemption has passed

Question 24

Limitation period for a debt action

Answer 24

12 years for capital

6 years for interest

Question 25

What if the proceeds of sale aren’t enough to cover debt

Answer 25

Can also use debt action for the remaining amount

Question 26

When would appointing a receiver be a good idea

Answer 26

When property is producing income

Question 27

When can a receiver be appointed

Answer 27

When power exists, has arisen and has become exercisable

Question 28

How to appoint recover

Answer 28

In writing

Question 29

Who chooses the receiver

Answer 29

Lender

Question 30

Can a receiver sell the property

Answer 30

Only if the terms of the mortgage allow it

Question 31

Who is the receiver accountable to | And who is responsible for the receiver

Answer 31

The borrower

Question 32

How is income obtained by a receiver applied

Answer 32

``` Outgoings of property Interest of prior mortgage Costs of property and receiver Interest of mortgage Capital on mortgage Balance to borrower ```

Question 33

If interests of lender and borrower conflict whose should the recover prioritise

Answer 33

The lender

Question 34

Duties of receiver to the borrower and others with equity of redemption

Answer 34

Ensure no conflict of interest Act with good faith Act with reasonable competence Reasonable care to obtain market value if power to sell May, but not obliged to, take steps to increase value of property

Question 35

When is foreclosure avaliable

Answer 35

When legal date for redemption has passed

Question 36

2 steps in foreclosure

Answer 36

Foreclosure nisi- prepare accounts to show what is owed followed by 6 month period to pay Foreclosure absolute - vest title in lender. Extinguish equity of redemption held by borrower

Question 37

Ways borrower is protected from foreclosure

Answer 37

Court has discretion to reopen proceedings If dwelling house can seek adjournment Apply for judicial sale instead to preserve equity of redemption

Question 38

Who can apply for judicial sale instead of foreclosure

Answer 38

Anyone with interest in equity of redemption

Question 39

What if the property is worth more or less then debt following foreclosure

Answer 39

Buyer is free from liability. doesn’t get any extra but won’t owe any extra either