Land law mortgages essay help

A mortgagee cannot sell to himself, or his nominee or to his agent.

land law mortgages problem question

Manual 3 UnitsOxford University Press, 11th ed. However the court rejected this argument on every count. In other words, in the case where the mortgagor fails to repay the debt or is in default the mortgagee will be entitled to obtain the secured land and sell it in order to take his money back.

Mortgages problem question model answer

Usually a court order for possession will be necessary in order to shield the lender from criminal and civil liability. Greer, S. The advantage to B is plain: if A is unable to pay the debt, then B can sell the secured property2 and use the proceeds to pay off the debt. The effect of a sale The mortgagor's Equity of Redemption is destroyed as soon as the contract of sale is made. It import a duty to strictly account for any rents and profits to the mortgagor: White v City of London Brewery Co Smith has questioned this analysis and it certainly needs to be read in the light of Kreglinger see below. A borrower is only entitled to seek relief under s. A mortgagee cannot sell to himself, or his nominee or to his agent. This power is clarified in Sections and LPA , with Section establishing the power arises when the mortgage money becomes due, whilst Section defines the threshold conditions that need to be established: Ladsky v TSB Bank Fourth paragraph Regarding equitable mortgages, the equitable mortgagee has no right at law to possession because he holds no legal estate Ashley Guarantee Plc v Zacaria. The Council of Mortgage Lenders CML forecast in February that there would be 75, repossessions in that year but this figure was revised downward in June and again in November to an estimated 48, Wood, p This power arises and becomes exercisable in the same circumstances as his power of sale, and is useful if the mortgagee wishes neither to realise his security nor to enter into possession of the mortgaged property. The courts will give the mortgagor six months to pay off the mortgage and only if no payment is made within the six months foreclosure will be made absolute. This seems an extensive amount of time, especially from a business perspective and may be understandable why a mortgagee might not seek a court order to exercise their right of possession.

The courts placed modest limits on this right, stating mortgagees must give mortgagors 28 days to discharge the entire debt as long as there was a reasonable prospect such payment could be made [Caunt].

Some reforms have had the practical effect of improving mortgagors' protection while others have not. When does the power become exercisable?

Jones v morgan mortgage

There was some hope that the passing of the HRA would correct this anomaly but the case of Horsham Properties v. This is only applied in mortgages of dwelling houses or in land including a dwelling house. Case law and statute have restricted this right. At first glance, the protocol seems rather toothless, supporting the view that it is a 'complete waste of time and paper' McAuslan, , p3. However the court rejected this argument on every count. So in the absence of evidence of wide scale use of the Horsham possession route by mortgagees such legislative change should be resisted. Firstly the Mortgage Rescue Scheme MRS was introduced in January offering the potential facility to mortgagors in arrears to remain in their property by allowing a social landlord to obtain a full or partial equity stake in their home. The Council of Mortgage Lenders CML forecast in February that there would be 75, repossessions in that year but this figure was revised downward in June and again in November to an estimated 48, Wood, p This seems an extensive amount of time, especially from a business perspective and may be understandable why a mortgagee might not seek a court order to exercise their right of possession. It is said that this remedy is more advantageous over foreclosure. While the court accepted that the mortgagor's equity of redemption was a possession within A1FP, it rejected the idea that this Article had been engaged on the facts as the mortgagors had lost their equity of redemption by operation of contract, rather than statute.

It expresses that it is acceptable in situations where the property may have been abandoned, however would not be in situations where the mortgagee is still in possession and an order should be sought. In such situations an adjournment of possession proceedings or a suspended possession order can be granted if it is likely that within a reasonable period the mortgagor will be able to pay off arrears of instalments and meet any further instalments which fall due within that reasonable period.

Most cases under the original test concerned interest rates, often relating to short term high risk loans. Rawcliffe, L.

Mobil oil v rawlinson

Usually a court order for possession will be necessary in order to shield the lender from criminal and civil liability. It also requires the lender to draw up their own code of conduct, policy and procedures regarding possession. Caunt []Ch HC ]. It was concluded that s did not deprive an applicant of their rights under A1FP, as it had the effect of helping to implement the private bargain of the parties rather than overriding the bargain entirely and consequently the bar to the claimed right was neither rigid, arbitrary or discriminatory [Wilson; Horsham]. The Council of Mortgage Lenders CML forecast in February that there would be 75, repossessions in that year but this figure was revised downward in June and again in November to an estimated 48, Wood, p The courts placed modest limits on this right, stating mortgagees must give mortgagors 28 days to discharge the entire debt as long as there was a reasonable prospect such payment could be made [Caunt]. Under s20 Limitation Act the limitation period is 6 years for claims relating to interest and 12 years relating to capital. Moreover, if the mortgagor fails to repay the loan then it is likely that sale will take place. Here, even though the first bit of the statement is now legally incorrect, what is important and efficient is that a mortgage is a security for the payment of the debt. Individuals, homeowners, and as such, the concern is a contractual disparity in power. The cost of lending would be increased with the result that access to credit for the wider population would be reduced.
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Essay on Mortgages