" The language that concerns the senators and advocates for the elderly is a proposed change in the National Housing Act that says, in regard to reverse mortgages, that a mortgagor "shall not include the successors and assigns of the original borrower under a mortgage.
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In a majority judgment,Mpati JA and Mthiyane JA concurring; Olivier JA and Nienaber JA dissenting. Harms JA held that, by the very nature of things, a mortgagor, being an owner, could not be an unlawful occupier. Only once the property had been sold in execution and transferred to a purchaser could the possession of the erstwhile mortgagor or owner become unlawful. To call a mortgagor an "unlawful occupier" was not only incongruous but also absurd.
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A valuer instructed by a mortgagor sent his report to the mortgagee who made an advance in reliance on the valuation.
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This unsettling system had a negative impact on the willingness of lenders to accept real estate as collateral security for loans. Since a lender could not re-sell the property until it had been in uncontested possession for years, or unless it could show changed circumstances, the value of real estate collateral was significantly impaired. Impaired, that is, until lawyers concocted the bill of foreclosure, whereby a mortgagee could request a decree that unless the mortgagor paid the debt by a date certain (and after the law date set in the mortgage), the mortgagor would thereafter be barred and foreclosed of all right, title and equity of redemption in and to the mortgaged premises. To complete the circle, one needs to understand that when a mortgagor fails to pay an installment when due, and the mortgagee accelerates the mortgage, requiring immediate repayment of the entire mortgage indebtedness, the mortgagor does not have a right to pay the past-due installment(s) and have the mortgage reinstated.
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McCall, 4 La. Ann. 324, the court reviewed the cases on this subject and held that where a mortgage contained the pact de non alienando, a party that purchases the property from the mortgagor cannot claim to be in any better condition than such mortgagor, and cannot plead any other exception, and that any alienation in violation of the pact is null. These cases, and those cited in the note, establish that non alienando mortgagees may enforce mortgages by proceeding against the mortgagor alone, without regard to subsequent disposition of the property, and that this binds anyone relying on such a disposition. In the Avegnor case,and in the later case of Shields v.
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The equity of redemption refers to the right of a mortgagor in law to redeem his or her property once the debt secured by the mortgage has been discharged.
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In a more borrower-friendly decision, Cheltenham & Gloucester Building Society v Norgan[1996] 1 WLR 343 Waite LJ gave guidance that in ordering a plan for repayment, a judge should give "the period most favourable to the mortgagor at the outset", so that repeated applications to court on continuing defaults could be avoided, and so that "the mortgagee can be heard with justice to say that the mortgagor has had his chance".
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Avegno v. Schmidt, 113 U.S. 293 (1885), was a case in which the United States Supreme Court held that title to property confiscated during the American Civil War was properly held by the mortgagor.
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He then carefully reviewed the authorities, and quoted at length from the decision of Romer LJ in Re George Inglefield Ltd [1933] Ch 1 at 27-28 in relation to the essential differences between a sale transaction and a mortgage transaction.In summary, Romer LJ indicated that the three key tests are (i) in a sale the seller is not entitled to have the good returned by repaying the purchase price, but in a mortgage the mortgagor is; (ii) if a mortgagee realises the property for more than the sum paid, then he must account to the mortgagor for the excess, but in a sale he would keep the profit, and (iii) if a mortgagee realises the property for less than the sum paid, he could pursue the mortgagor for the balance, but in a sale he must bear the loss.
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Other types of foreclosure are considered minor because of their limited availability. Under strict foreclosure, which is available in a few states including Connecticut, New Hampshire and Vermont, if the mortgagee wins the court case, the court orders the defaulted mortgagor to pay the mortgage within a specified period of time. Should the mortgagor fail to do so, the mortgage holder gains the title to the property with no obligation to sell it. This type of foreclosure is generally available only when the value of the property is less than the debt ("under water").
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Mortgages in English law are a method of raising capital through a loan contract. Typically with a bank, the lender/mortgagee gives money to the borrower/mortgagor, who uses their property/land/home as security (essentially a reassurance) that they will repay the debt and any relevant interest. If the mortgagor fails to repay, then the mortgaged property which has been used as security may be subject to various mortgagee remedies allowing them to retrieve the debt. Mortgages are an important part of English land law and property law.
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Hoffmann J dismissed the appeal. He said the bank was entitled contractually to appoint receivers. It owed no duty of care when doing so to any mortgagor or guarantor. It was protecting its interests and could not be challenged.
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Legal systems in different countries, while having some concepts in common, employ different terminology. However, in general, a mortgage of property involves the following parties. The borrower, known as the mortgagor, gives the mortgage to the lender, known as the mortgagee.
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Foreclosure investment refers to the process of investing capital in the public sale of a mortgaged property following foreclosure of the loan secured by that property. In real estate, foreclosure is the termination of the equity of redemption of a mortgagor or the grantee in the property covered by the mortgage. Depending on the type of foreclosure proceeding, the sale may be administered by the courts (judicial foreclosure) or by an appointed trustee (statutory foreclosure). Proceeds from the sale are used to satisfy the claims of the mortgagee primarily, with any excess going to the mortgagor.
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"Mortgage", Wex Legal Dictionary. In title-theory states, a mortgage continues to be a conveyance of legal title to secure a debt, while the mortgagor still retains equitable title.U.S. Bank v. Ibanez, Massachusetts Supreme Judicial Court, SJC-10694, January 7, 2011, page 12.
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An appeal to a Full Bench was also dismissed. The argument in Bekker was that, since the Legislature regarded the mortgagor as an unlawful occupier, it had to follow that the definition could not be restricted to persons who took occupation unlawfully.
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34(3): a breach of warranty may be waived by the insurer. :s.50: a policy may be assigned. Typically, a shipowner might assign the benefit of a policy to the ship-mortgagor. :ss.60-63: deals with the issues of a constructive total loss.
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The lien is said to attach to the title when the mortgage is signed by the mortgagor and delivered to the mortgagee and the mortgagor receives the funds whose repayment the mortgage secures. Subject to the requirements of the recording laws of the state in which the mortgaged property is located, this attachment establishes the priority of the mortgage lien with respect to most other liensExceptions include real estate tax liens and, in most states, mechanic's liens. on the property's title.The failure to record a previously made mortgage may, under some circumstances, allow a subsequent mortgagee's mortgage to be recognized as prior in right to the otherwise prior mortgage.
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Acceleration is a clause that is usually found in Sections 16, 17, or 18 of a typical mortgage in the US. Not all accelerations are the same for each mortgage, as it depends on the terms and conditions between lender and obligated mortgagor(s). When a term in the mortgage has been broken, the acceleration clause goes into effect. It can declare the entire payable debt to the lender if the borrower(s) were to transfer the title at a future date to a purchaser. The clause in the mortgage also instructs that a notice of acceleration must be served to the obligated mortgagor(s) who signed the Note.
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See Bank Stocks Slump On Foreclosure Ruling, New York Times Dealbook. In lien-theory states, mortgages and deeds of trust have been redesigned so that they now impose a nonpossessory lien on the title to the mortgaged property, while the mortgagor still holds both legal and equitable title.
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A conveyance of mortgaged land by the mortgagor to the mortgagee extinguishes the mortgage. However taking a promissory note for the amount due on the mortgage does not deprive the mortgage holder of a right to a lien, but merely suspends its enforcement until the note is payable.
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When a tract of land is purchased with a mortgage and then split up and sold, the "inverse order of alienation rule" applies to decide parties liable for the unpaid debt. When a mortgaged tract of land is split up and sold, upon default, the mortgagee first forecloses on lands still owned by the mortgagor and proceeds against other owners in an 'inverse order' in which they were sold. For example, Alice acquires a lot by mortgage then splits up the lot into three lots (X, Y, and Z), and sells lot Y to Bob, and then lot Z to Charlie, retaining lot X for herself. Upon default, the mortgagee proceeds against lot X first, the mortgagor.
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Title theory is "the idea that a mortgage transfers legal title of the mortgaged property from the mortgagor to the mortgagee, which retains it until the mortgage has been satisfied or foreclosed. Only a few American States...have adopted this theory."Black's Law Dictionary, 9th Ed., p. 1624, Thompson Reuters, 2009.
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These concern, first, the common law, statutory and regulatory rules to protect the mortgagor (i.e. the borrower) at the time of concluding the mortgage agreement. Second, English law defines and restricts the process for taking possession of property in the event of default. Third, it places duties on mortgagees (i.e.
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The court held, firstly, that a mortgage bond may be used both as an instrument of hypothecation and also as a record of debt, and secondly that it is matter of custom in drafting mortgage bonds to incorporate an admission of liability by the mortgagor to facilitate a quick and easy remedy.
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The mortgagor may be required to pay for Private Mortgage Insurance, or PMI, for as long as the principal of his or her primary mortgage is above 80% of the value of his or her property. In most situations, insurance requirements guarantee that the lender gets back some pre-defined proportion of the loan value, either from foreclosure auction proceeds or from PMI or a combination of those. Nevertheless, in an illiquid real estate market or if real estate prices drop, the property being foreclosed could be sold for less than the remaining balance on the primary mortgage loan, and there may be no insurance to cover the loss. In this case, the court overseeing the foreclosure process may enter a deficiency judgment against the mortgagor.
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Downsview Nominees Ltd v First City Corp Ltd [1992] UKPC 34 is a New Zealand insolvency law case decided by the Judicial Committee of the Privy Council concerning the nature and extent of the liability of a mortgagee, or a receiver and manager, to a mortgagor or a subsequent debenture holder for his actions.
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He must also > take reasonable care of the property. Similarly if he sells the property: he > cannot sell hastily at a knock-down price sufficient to pay off his debt. > The mortgagor also has an interest in the property and is under a personal > liability for the shortfall. The mortgagee must keep that in mind.
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Lien theory is "the idea that a mortgage resembles a lien, so that...", pursuant to a mortgage, "...the mortgagee acquires only a lien on the property and the mortgagor retains both legal and equitable title unless a valid foreclosure occurs. Most American states...have adopted this theory."Black's Law Dictionary, 9th Ed., p. 1009, Thompson Reuters, 2009.
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Strangely absent from this list is the mortgage agreement. This implies that the mortgagee (a bank, usually) will be able to rely only on the proceeds of the sale of the property to settle the account—even if this is insufficient, and even if the mortgagor (the debtor) is very wealthy and has other assets that could be attached.
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If the borrower defaults the lender can possesses the property. Mortgage possession is not to be confused with foreclosure. In the United Kingdom foreclosure is a little used remedy which vests the property in the mortgagee with the mortgagor having no right to any surplus from the sale. Because this remedy can be harsh, courts almost never allow it.
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A deed in lieu of foreclosure is a deed instrument in which a mortgagor (i.e. the borrower) conveys all interest in a real property to the mortgagee (i.e. the lender) to satisfy a loan that is in default and avoid foreclosure proceedings. The deed in lieu of foreclosure offers several advantages to both the borrower and the lender.
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Under title theory, a mortgage has the effect of a deed passing legal title, though conditionally, of the mortgaged property to the mortgagee (the lender in a loan agreement being secured by the mortgage), with so-called "equitable title" (which is really equity of redemption) being retained by the mortgagor (the borrower in the loan). The fact of the mortgagor's retaining of the "equity of redemption" is the fact which renders the passing of title under title theory conditional. Mortgages within title theory jurisdictions, then, may be viewed as having the action of what might be called "conditional deeds". Though legal title is passed pursuant to a mortgage therein, the arrangement is generally construed by courts to recognize the mortgagor as "owner" of the mortgaged property within title theory jurisdictions.
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Historically, a mortgagor (the borrower) and a mortgagee (the lender) executed a conveyance of legal title to the property in favour of the mortgagee as security for the loan. If the loan was repaid, then the mortgagee would return the property; if the loan was not repaid, then the mortgagee would keep the property in satisfaction of the debt. The equity of redemption was the right to petition the courts of equity to compel the mortgagee to transfer the property back to the mortgagor once the secured obligation had been performed.See Santley v Wilde [1899] 2 Ch 474 Today, most mortgages are granted by statutory charge rather than by a formal conveyance, although theoretically there is usually nothing to stop two parties from executing a mortgage in the more traditional manner.
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Technically the right to appoint a receiver can arise two different ways - under the terms of the mortgage instrument, and (where the mortgage instrument is executed as a deed) by statute. If the mortgagee takes possession then under the common law they owe strict duties to the mortgagor to safeguard the value of the property (although the terms of the mortgage instrument will usually limit this obligation). However, the common law rules relate principally to physical property, and there is a shortage of authority as to how they might apply to taking "possession" of rights, such as shares. Nonetheless, a mortgagee is well advised to remain respectful of their duty to preserve the value of the mortgaged property both for their own interests and under their potential liability to the mortgagor.
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In January 1840 George Robert Nichols mortgaged the land to Thomas Walker for 3500 pounds at 15%. In May 1842 he borrowed a further 900 pounds on the security of the property. None of that money was repaid to Walker. In the meantime the remaining title the mortgagor had over the land was conveyed to James Holt, a Sydney merchant.
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This appears to be borne out by the Wairuna lease being held by the Bank of New South Wales as mortgagor for James Atkinson from 26 September 1887, which was still the case in 1900. However, Geoffrey Bolton states that "[g]radually between 1870 and 1890 most of the northern graziers achieved, if not prosperity, a modest standard of comfort".
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Mortgage modification is a process where the terms of a mortgage are modified outside the original terms of the contract agreed to by the lender and borrower (i.e. mortgagee and mortgagor in mortgage states; Trustee and Trustor in Trust Deed states). In general, any loan can be modified, and the process is referred to as loan modification or debt rescheduling.
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The Insolvency ActAct 24 of 1936. contains an exhaustive list of priorities of statutory preferences on insolvency.ss 96-102. The court found that a special notarial bond over specified movable property, when that property has remained in the possession of the mortgagor until the sequestration of his estate, is not included in this list and accordingly does not confer a statutory preference in favour of the mortgagee.
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Sometimes this theory is referred to as the "Equitable Theory of Mortgages". Under lien theory. a mortgage acts to place a lien on the mortgaged property in favor of the mortgagee, and legal title is retained by the mortgagor. Judicial foreclosure is most often necessary as a remedy to default pursuant to mortgages within lien theory jurisdictions, and this process has been found to be cumbersome, time consuming and costly.
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Foreclosure by judicial sale, commonly called judicial foreclosure, involves the sale of the mortgaged property under the supervision of a court. The proceeds go first to satisfy the mortgage, then other lien holders, and finally the mortgagor/borrower if any proceeds are left. Judicial foreclosure is available in every US state and required in many (Florida requires judicial foreclosure). The lender initiates judicial foreclosure by filing a lawsuit against the borrower.
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De Savoye, the appellant, was the mortgagor of a property in Alberta and resided in British Columbia. The mortgage defaulted and the respondents brought action in Alberta, for the land they had mortgaged in that same province. The appellant chose not to appear or defend his actions. The respondents obtained judgment ex juris in the foreclosure action, and then obtained orders for the judicial sale of the properties.
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A mortgagor is the borrower in a mortgage—he owes the obligation secured by the mortgage. Generally, the borrower must meet the conditions of the underlying loan or other obligation in order to redeem the mortgage. If the borrower fails to meet these conditions, the mortgagee may foreclose to recover the outstanding loan. Typically the borrowers will be the individual homeowners, landlords, or businesses who are purchasing their property by way of a loan.
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Before moving in they made improvements to the premises, rebuilding part of the facade by erecting an archway on the ground level, described as the finest in the city. Gailey transferred title to his mortgagor Australian Mutual Provident Society in July 1894. AMP issued a 3 year lease to John, Samuel and Arthur Morley Hardy. The Hardy brothers initially leased only the ground and basement floors, and purchased the site in October 1895.
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Typically, a shipowner might assign the benefit of a policy to the ship-mortgagor.:§§60-63: deals with the issues of a constructive total loss. The insured can, by notice, claim for a constructive total loss with the insurer becoming entitled to the ship or cargo if it should later turn up. (By contrast an actual total loss describes the physical destruction of a vessel or cargo.):§79: deals with subrogation, i.e.
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Deficiency judgments can be used to place a lien on the borrower's other property that obligates the mortgagor to repay the difference. It gives lender a legal right to collect the remainder of debt out of mortgagor's other assets (if any). There are exceptions to this rule. If the mortgage is a non-recourse debt (which is often the case with owner- occupied residential mortgages in the U.S.), lender may not go after borrower's assets to recoup his losses.
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The judge renders judgment, ordering the mortgagor to pay the debt within a period of 90–120 days. If the debt is not paid within the said period, a foreclosure sale satisfies the judgment. In an extrajudicial foreclosure, the mortgagee need not initiate an action in court but may simply file an application before the Clerk of Court to secure attendance of the Sheriff who conducts the public sale. This is done pursuant to a power of sale.
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This parish road (established at the request and maintenance of the inhabitants of the district) was surveyed in 1858. Smyth retained ownership of the grant until July 1847 when it was sold to Herbert Solway. Solway's ownership was relatively short; selling the property in October 1852 to John Stirling. Stirling mortgaged the property and in defaulting on his repayments the property was sold by his mortgagor, W. D. Nunn, to Richard Albert Watson in January 1881.
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He was buried at South Head Cemetery, Vaucluse, Sydney (the story that he was buried in a tomb with his wife and pet pony is a popular myth). He was close to destitute at the time of his death. His home, Cranbrook Cottage, had been repossessed by the mortgagor; it was demolished in 1925 to make room for the widening of New South Head Road. The site of the cottage is marked by a small rock garden, named Horbury Hunt Place.
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The Swan Brewery appealed to the Full Court of the Supreme Court. Parker CJ, Burnside and Rooth JJ allowed the appeal, finding that a mortgagor was only entitled to redeem a mortgage only after discharge of all the obligations under the mortgage, which included the exclusive dealing clause. This was a bargain freely entered into, with no question of fraud, duress or unfair dealing. The exclusive dealing clause was a collateral advantage that the Swan Brewery was able to obtain and enforce.
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Since in both countries, the Torrens title system of land registration is used, being registered as proprietor or as a mortgagee creates an indefeasible interest (unless the acquisition of the registration was by land transfer fraud). The mortgagee therefore never holds the fee simple, and there is a statutory process for initiating and conducting a mortgagee sale in the event that the mortgagor defaults. In New Zealand, as in England, say, the land title database is now electronic so there are no paper "title documents".
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Shortly afterwards Crouch formed a partnership with Jack Porter, also of Wellington, and they traded as Porter and Crouch. The left-leaning paper was boycotted, especially by auctioneers who would not advertise in it and eventually the business was taken over by Crouch’s mortgagor Mark Bembrick, also of Wellington. Bembrick disposed of the business to Percival Stuart Garling, formerly of the Mudgee Western Post. He soon had The Leader on a firm footing and the paper was recognised as a first class advertising medium.
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Because the purpose of the deposits is to be security for the mortgage, the protection afforded by the Financial Services Compensation Scheme does not apply. Family is the first UK building society to include a payment waiver product, offered in conjunction with CUNA Mutual Group, where the mortgage repayments are met for up to six months if the mortgagor lose their job through no fault of their own. To enable high loans to value mortgages to be provided, Family will offer mortgage insurance products from Genworth Financial.
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Lenders mortgage insurance (LMI), also known as private mortgage insurance (PMI) in the US, is insurance payable to a lender or trustee for a pool of securities that may be required when taking out a mortgage loan. It is insurance to offset losses in the case where a mortgagor is not able to repay the loan and the lender is not able to recover its costs after foreclosure and sale of the mortgaged property. Typical rates are $55/mo. per $100,000 financed, or as high as $125/mo.
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Peaslee & Nirenberg at 453. The IRC defines “principally secured” as either having “substantially all of the proceeds of the obligation . . . used to acquire or to improve or protect an interest in real property that, at the origination date, is the only security for the obligation” or having a fair market value of the interest that secures the obligation be at least 80% of the adjusted issue price (usually the amount that is loaned to the mortgagor)Peaslee & Nirenberg at 459. or be at least that amount when contributed to the REMIC.
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Chinese law and mortgage practices have progressed with safeguards to prevent foreclosures as much as possible. These include mandatory secondary security, rescission (Chinese Contract Law), and maintaining accounts at the lending bank to cover any defaults without prior notice to the borrower.Pacific Rim Law Policy Journal; vol 8 No.3 page 558 -Retrieved 2013-07-20 A mortgagee may sue on a note without foreclosing, obtain a general judgment, and collect that judgment against other property of the mortgagor, without foreclosing. When all other avenues have failed a lender may seek a judgement of foreclosure.
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Firstly, the Ijarah wa Iqtina lessor/lender can evict the borrower/buyer who is "a few months in arrears" because the borrower is a tenant not an owner. In contrast the conventional borrower/buyer/mortgagor cannot because they have "security of tenure". Secondly if the Lender/mortgagee in a conventional mortgage does foreclose on the buyer and re-sell the property, they are "obliged by law to secure the best possible price" and to make available, "a full account" of the resale transactions to the foreclosed borrower. In a Ijarah wa Iqtina contract the lessor/lender has "no such obligation" to the lessee.
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Because of the requirement to transfer title, it is not possible to take a legal mortgage over future property, or to take more than one legal mortgage over the same assets. However, mortgages (legal and equitable) are nonpossessory security interests. Normally the party granting the mortgage (the mortgagor) will remain in possession of the mortgaged asset. The holder of a legal mortgage has three primary remedies in the event that there is a default on the secured obligations: #they can foreclose on the assets, #they can sell the assets, or #they can appoint a receiver over the assets.
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In response to a question in the application as to who would occupy the premises, "V" replied that it would be occupied by Sweet. In the space opposite the question "if tenanted, monthly rental?", the letters "N/A" appeared. "V" also agreed on behalf of Sweet that the latter would be bound by the bank's "standard conditions for mortgage loans," one of which was contained in the mortgage bond and provided that the "mortgagor agrees that the mortgaged property shall not be let for a longer period than one month without the written consent of" the bank.
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This does not mean that an exercise of such a contractual discretion is necessarily unassailable; it may be voidable at the instance of the other party. It is a rule of the common law that, unless a contractual discretionary power is clearly intended to be completely unfettered, an exercise of such a discretion must be made arbitrio bono viri. The discretionary powers vested in mortgagees in terms of mortgage bonds conferring upon the mortgagees the right unilaterally to increase the original rate of interest payable by the mortgagor must therefore be subject to the aforesaid inherent limitation. Such a provision in a mortgage bond is therefore valid.
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During the widespread economic depression of the early 1890s, William Street was forced to liquidate his business affairs, his Creek Street property passing to his mortgagor, the Queensland National Bank, in 1893. The Drew family's 1888 house was located on this property, which in 1904 Albert Edward Drew, Samuel Drew's son, purchased from the bank. From 1889 the land west of Street's Joinery Works, along Wharf Street, was made available as residential allotments. Samuel Drew acquired title to (resubdivisions 96-98 of subdivision A of allotment 3 of section 15, Village of Sandgate) of unimproved land backing onto Cabbage Tree Creek and fronting Wharf Street, in May–June 1890.
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In the event of non-payment of its mortgage-related obligations by the mortgagor, the mortgage bank may put the property up for a forced sale. Forced sales are carried through by enforcement courts (Fogedretten), which are part of the ordinary system of courts. Mortgagees will be covered in order of priority and while uncovered mortgage loans will be deleted from the Land Register, the mortgagees will keep their (uncovered) claim against the borrower as a personal claim. It typically takes no more than six months from the time when the borrower defaults on the loan until a forced sale can be carried through.
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This arrangement, whereby the lender was in theory the absolute owner, but in practice had few of the practical rights of ownership, was seen in many jurisdictions as being awkwardly artificial. By statute the common law's position was altered so that the mortgagor (borrower) would retain ownership, but the mortgagee's (lender's) rights, such as foreclosure, the power of sale, and the right to take possession, would be protected. In the United States, those states that have reformed the nature of mortgages in this way are known as lien states. A similar effect was achieved in England and Wales by the Law of Property Act 1925, which abolished mortgages by the conveyance of a fee simple.
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Wassell, ubi supra, a bill, filed during the owner's lifetime by the condemned's children to protect the property from any encumbrance arising from the owner's failure to pay taxes was sustained. The court declared that in the absence of any other steward, the children might act in that capacity. These decisions apparently sustain the plaintiff's contention that foreclosing the mortgage was without the necessary parties, and was therefore void for want of jurisdiction. The defendants responded that because Avegno's mortgage contained the pact de non alienando (in which the mortgagor agrees not to alienate/encumber the premises to the prejudice of the mortgage), he was the only necessary party to Morgan's suit.
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When the 10 or 30 days have passed that means that the acceleration has expired and the Lender can move forward with foreclosing on the property. The lender will also include any unpaid property taxes and delinquent payments in this amount, so if the borrower does not have significant equity they will owe more than the original amount of the mortgage. Lenders may also accelerate a loan if there is a transfer clause, obligating the mortgagor to notify the lender of any transfer, whether; a lease-option, lease-hold of 3 years or more, land contracts, agreement for deed, transfer of title or interest in the property. The vast majority (but not all) of mortgages today have acceleration clauses.
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In April 2011, in Residential Funding v. Saurman, the Michigan Court of Appeals decided two consolidated cases holding that MERS did not have standing to foreclose non-judicially pursuant to MCL 600.3204(1)(d) because it did not actually own any interest in the debt. The Michigan Supreme Court reversed the decision in an order November 16, 2011, finding that MERS is the owner of an interest in the mortgage because "[MERS'] contractual obligations as mortgagee were dependent upon whether the mortgagor met the obligation to pay the indebtedness which the mortgage secured." However, the court clarified that MERS's status as an "owner of an interest in the indebtedness" does not equate to an ownership interest in the note.
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" On November 16, 2011, the Michigan Supreme Court, understanding the urgency and potential fallout of this matter, issued a peremptory order, in lieu of granting the appeal, and reversed the Court of Appeals judgment. (Residential Funding Co, LLC v Saurman, 2011 WL 5588929 (Mich, November 1, 2011). The court agreed with the dissenting Court of Appeals opinion, "pursuant to MCL 600.3204(1)(d), Mortgage Electronic Registration System (MERS) is the 'owner . . . of an interest in the indebtedness secured by the mortgage at issue in each of these consolidated cases' because '[MERS] contractual obligations as the mortgagee were dependent upon whether the mortgagor met the obligation to pay the indebtedness which the mortgage secured.
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A subordination agreement is a legal document used to make the claim of one party junior to (or inferior to) a claim in favor of another. It is generally used to grant first lien status to a lienholder who would otherwise be secondary to another party, with the approval of the party that would otherwise have first lien. Typically a subordination arises when there are two existing mortgages, a first mortgage and a second mortgage, and the mortgagor intends to refinance the first mortgage. If the holder of the second mortgage does not subordinate the lien of its mortgage to the new mortgage, the new lender will not refinance the first mortgage.
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Today, a mortgagor refers to his interest in the property as his "equity". The origin of the concept, however, was actually a mirror-image of the current practice. At common law, a mortgage was a conveyance of the property, with a condition subsequent, that if the grantor paid the secured indebtedness to the grantee on or before a date certain (the "law" day) then the condition subsequent would be void, otherwise to remain in full force and effect. As was inevitable, debtors would be unable to pay on the law day, and if they tendered the debt after the time had passed, the creditor owed no duty to give the land back.
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Mortgage acceleration is the practice of paying off a mortgage loan faster than required by terms of the mortgage agreement. As interest on mortgages is compounded, early payments diminish the period needed to pay off the mortgage, and avoid a quotient of compounded interest. In addition, acceleration may refer to a clause in a mortgage note (See Acceleration clause) that allows the mortgage holder to declare the entire debt of a defaulted mortgagor due and payable. A commonplace method of mortgage acceleration is a so-called bi- weekly payment plan, in which half of the normal calendar monthly payment is made every two weeks, so that 13/12 of the yearly amount due is paid per annum.
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2) Regulations 2003 where the assets subject to the mortgage are "financial collateral" and the mortgage instrument provides that the regulations apply. Appropriation is a means whereby the mortgagee can take title to the assets, but must account to the mortgagor for their fair market value (which must be specified in the mortgage instrument), but without the need to obtain any court order. In 2009, the Judicial Committee of the Privy Council ruled that as a matter of English law: #Appropriation is much closer to sale than it is to foreclosure. It is in effect a sale by the collateral- taker to himself, at a price determined by an agreed valuation process.
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The term “bill of sale” originally referred to any writing by which an absolute disposition of personalty for value was effected or evidenced. A common feature of such dispositions is that the owner mortgagor remains in possession and exercises all the attendant rights of ownership, which may be so overwhelming as to induce a third party to accept the same chattel as a security for a grant, albeit without notice of the first mortgagee. This scenario made the bill of sale a veritable tool of fraud. The evolution of various bills of sale laws, within the USA, was to curb the use of the bill of sale as a means of defrauding innocent persons.
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A flexible mortgage system applies to vessels register under MAR, allowing the mortgagor and the mortgagee to choose, through written agreement, and the legal system of a particular country that shall govern the terms of the mortgage. Only in case of lack of an agreement shall the Portuguese mortgage law be applicable to vessel registered. Surveys Surveys of yachts registered within MAR can be delegated on classification societies, or on other recognized entities duly approved by the Portuguese Government. Under current register's rules only eight classification societies are recognized as competent to conduct surveys within MAR: American Bureau of Shipping, Bureau Veritas, Det Norske Veritas, Lloyd's Register, Registro Italiano Navale, Rinave Portuguesa, Germanischer Lloyd and ClassNK.
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On April 3, 1862, Bernard Avegno, the owner of the disputed property, mortgaged it to Israel C. Harris to secure promissory notes made by Avegno, payable to his own order and endorsed by him, totaling 500, which he delivered to Harris. The mortgage contained the pact de non alienando, by which the mortgagor agreed not to sell, alienate, or encumber the mortgaged property to the prejudice of the mortgage. The notes and mortgage were afterwards transferred by Harris to Charles Morgan. The mortgage was still in force, when on January 20, 1865, the United States filed, in Louisiana District Court, a libel of information against the property, to condemn it as confiscated under the Act of July 17, 1862, 12 Stat.
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The necessity for attornment was abolished by an act of 1705. In mortgages, an attornment clause is a clause whereby the mortgagor attorns tenant to the mortgagee, thus giving the mortgagee the right to distrain, as an additional security. As used in modern legal transactions, the term attornment refers to an acknowledgment of the existence of the relationship of landlord and tenant. A tenant often has the duty under the tenant's lease, particularly in commercial leases, to provide an attornment upon request, and is required by a creditor or potential buyer of property from the landlord to establish the nature of existing encumbrances on and income streams flowing from a property, as an element of the due diligence process associated with the transaction.
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Mortgage insurance is an insurance policy designed to protect the mortgagee (lender) from any default by the mortgagor (borrower). It is used commonly in loans with a loan- to-value ratio over 80%, and employed in the event of foreclosure and repossession. This policy is typically paid for by the borrower as a component to final nominal (note) rate, or in one lump sum up front, or as a separate and itemized component of monthly mortgage payment. In the last case, mortgage insurance can be dropped when the lender informs the borrower, or its subsequent assigns, that the property has appreciated, the loan has been paid down, or any combination of both to relegate the loan-to-value under 80%.
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The most critical benefits of registration for the mortgagee is obtaining priority, with priority ranking solely decided by the date of registration. By giving a "notice to the world", the registered mortgagee could be protected from all later secured creditors of the mortgagor, who may seek further finance from other sources using the same ship as security. In UK, regulation 59 of the Merchant Shipping (Registration of Ships) Regulations 1993, mortgagees of a ship or a share in a registered British ship are allowed to give notice of their intended interests to and recorded by the Registrar. Once later executed or registered, the registered mortgagees will have priority over the other registered mortgages which may have been fully registered in the first place.
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In prior English law, a warrant of attorney was a security authorizing a solicitor to collect a debt on behalf of a creditor. It is now subsumed in the general power of attorney. A warrant of attorney was a security for money in the form of an authority to a solicitor named by a creditor, empowering him to sign judgment in an action against the debtor for the sum due, with a defeasance—a clause that the warrant shall not be put into force in case of due payment of the money secured. It was often used as a collateral security, either for the payment of an annuity or with mortgages, in order that the mortgagee, by entering up judgment, might obtain priority in the administration of the assets of the mortgagor.
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The equity of redemption is itself recognised as a separate species of property, and can be bought, sold or even itself mortgaged by the holder. Historically the equity of redemption would naturally expire upon the mortgagor breaching the terms of repayment. However, in modern times, extinguishing the equity of redemption (and leaving the mortgagee with absolute title to the property) ordinarily requires a court order in most jurisdictions. For both legal and practical reasons, the use of foreclosure as a remedy has fallen into disuse.Foreclosure used to be a mortgagee’s primary remedy, but "it is now rarely sought or granted." see Palk v Mortgage Services Funding plc [1993] Ch 330 at 336 Even where a mortgagee seeks an order for foreclosure from the courts, the courts will frequently order judicial sale of the property instead.
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A home in Louisiana damaged by Hurricane Katrina In the United States, most home buyers borrow money in the form of a mortgage loan, and the mortgage lender often requires that the buyer purchase homeowner's insurance as a condition of the loan, in order to protect the bank if the home is destroyed. Anyone with an insurable interest in the property should be listed on the policy. In some cases the mortgagee will waive the need for the mortgagor to carry homeowner's insurance if the value of the land exceeds the amount of the mortgage balance. In such a case even the total destruction of any buildings would not affect the ability of the lender to be able to foreclose and recover the full amount of the loan.
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A person who borrows money that is secured against an interest in land (the mortgagor) has a right to redeem the mortgage on repayment of the principal (sum) (plus interest if required by the deed and permitted by the law, such as in a commercial agreement, plus any arrears). This right was enforced by courts of equity and is the equity of redemption. Courts of equity would not permit restrictions on this right, and "[a]ny provision inserted to prevent redemption on payment or performance of the debt or obligation for which the security was given, is what is meant by a clog or fetter upon the equity of redemption and is therefore void".Santley v Wilde [1899] 2 Ch 474 per Lord Lindley, cited with approval by Lord Halsbury LC in .
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In the United Kingdom, foreclosure is a little-used remedy which vests the property in the mortgagee with the mortgagor having neither the right to any surplus from the sale nor liability for any shortfall. Because this remedy can be harsh, courts almost never allow it especially if a large surplus is likely to be realised, furthermore when a substantial surplus is unlikely to be realised then mortgagees are disinclined to seek foreclosure in the first place since that remedy leaves them no recourse to recover a shortfall. Instead, the courts usually grant an order for possession and an order for sale, which both mitigates some of the harshness of the repossession by allowing the sale while allowing lenders further recourse to recover any balance owing following a sale. The United Kingdom foreclosure system is unique and true foreclosures are quite uncommon.
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At that period the main building comprised 15 rooms, with a large shop and storeroom on the ground floor, residential accommodation on the first floor, bathroom, kitchen, stables, coach-house and a large underground water tank with pump. Despite an attempt in 1893 by David Clarke's mortgagor, the Queensland Investment and Land Mortgage Co. Ltd, to sell the property, the title remained in Clarke's name until November 1909, when it was transferred to retired Freestone farmer and grazier, James Wilson. During the period 1883-1909 the property was let either as a house, store or both. Tenants included Dr William Tilley, surgeon at the Warwick hospital, from 1887 to 1889; Mrs WD Wilson, storekeeper and widow of a former Warwick businessman and Mayor, 1891–94; and S Benjamin, wine and spirit merchant, from 1899 until at least the early 1900s.
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House in Salinas, California, under foreclosure, following the bursting of the U.S. real estate bubble Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan. Formally, a mortgage lender (mortgagee), or other lienholder, obtains a termination of a mortgage borrower (mortgagor)'s equitable right of redemption, either by court order or by operation of law (after following a specific statutory procedure). Usually a lender obtains a security interest from a borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults and the lender tries to repossess the property, courts of equity can grant the borrower the equitable right of redemption if the borrower repays the debt.
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He contracted with Banks & Co to furnish supplies, but was compelled to put his name to the bond for the supplies. An order was given by Greene to Robert Morris for payment of the amount; this was paid by the Government of the United States to the contractor, who did not use it to pay the debt and left the bond unpaid. Greene paid the debt himself, and in 1791 his executrix petitioned Congress for relief. Greene had obtained some security from a partner of Banks & Co named Ferrie on a mortgage or lien on a tract of land, but the land was liable to a prior mortgage of £1,000 sterling to an Englishman named Murray. In 1788, the mortgagor in England filed a bill to foreclose on the mortgage, while Greene's family instituted proceedings against Ferrie, who was entitled to a reversionary interest in the land.
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Waite LJ, 353, ‘the court should take as its starting point the full term of the mortgage and pose at the outset the question: “Would it be possible for the mortgagor to maintain payment-off of the arrears by instalments over that period?”’ The courts would probably need to consider more comprehensive accounts and financial information, but that and accompanying practical difficulties ‘should not however be allowed, in my judgment, to stand in the way of giving effect to the clearly intended scheme of the legislation.’ They had been to court many times and C&G; was adding the cost of its proceedings to the bill against Mrs Norgan and her husband, who were struggling along. These will ultimately have to be paid and that shows the disadvantage of multiple and continued applications to court under the Administration of Justice Act 1970 section 36.
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Transactions involving deeds of trust are normally structured, at least in theory, so that the lender/beneficiary gives the borrower/trustor the money to buy the property; the borrower/trustor tenders the money to the seller; the seller executes a grant deed giving the property to the borrower/trustor; and the borrower/trustor immediately executes a deed of trust giving the property to the trustee to be held in trust for the lender/beneficiary. In reality, an escrow holder is always used so that the transaction does not close until the escrow holder has the funds, grant deed, and deed of trust in their possession. This ensures the transaction can be easily rescinded if one party is unable to complete its part of the deal. Deeds of trust differ from mortgages in that deeds of trust always involve at least three parties, where the third party holds the legal title, while in the context of mortgages, the mortgagor gives legal title directly to the mortgagee.
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The property then consisted of , the Beach Hotel, a large residence and numerous fruit trees. No license for the Beach Hotel has been identified. The hotel did not sell at this time. In October 1890 J Armitage was appointed Superintendent of Coconut Planting by the Queensland government, to plant and manage coconut palms on coastal islands for the use of shipwrecked sailors. He appears to have held this position for a short period only, someone else being appointed to the position in July 1892. Armitage was declared insolvent in 1893, at which time his Eimeo property passed to his mortgagor, the Queensland National Bank, which leased the whole of the land to Robert Bridgman from 1895. Bridgman conducted the boarding house at Eimeo. Armitage retained some connection with the area, being listed as an apiarist at Eimeo in the 1900 Queensland Post Office Directory. He died in Brisbane in 1919. In 1905, George Francis Bridgman obtained title to the property, which was transferred in 1913 to Mackay publican Martin Hassett, and in 1915 to another Mackay hotelkeeper, William Thomas Eyles. From at least Eyles' occupation, the business was known as the Eimeo Hotel.
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The power of possession allows a mortgagee to take actual possession of the mortgaged property, and this may be for reasons including a desire to sell the property to retrieve the debt, or for the purpose of handling the property whilst it continues to produce an income. Possession is available the moment the mortgage is created, and importantly does not require any default to be exercisable. However, if the parties agree on restrictions/amendments to the power of possession, it may therefore be altered.Four-Maids Ltd v Dudley Marshall (Proprieties) Ltd [1957] Ch 317, at 320 Regarding dwelling-houses and court issued possession orders, the court has the power to adjourn proceedings, and suspend or postpone an order of possession, if it is satisfied "that in the event of its exercising the power [of adjournment, suspension or postponement] the mortgagor is likely to be able within a reasonable period to pay any sums due under the mortgage or to remedy a default consisting of a breach of any other obligation arising under or by virtue of the mortgage".Administration of Justice Act, s36(1) This delay may be for whatever length of time the court believes is reasonable.
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