Remedies of a legal mortgage

Fore closure: this is a court order which extinguishes the borrower’s equitable right to redeem the property. The interest of the borrower in the property is vested in mortgagee.
Statutory power of sale: this is the right of the mortgagee to sell the security. This power arises as soon as the legal date for redemption has passed. However, the following conditions must be satisfied:
o A three months notice must have been served on the mortgagor requiring payment of the outstanding loan and such notice has expired, or
o Interest on the loan is in arrears for two months, or more
o There has been a breach of some other covenant in the mortgage.
Possession of security: this power is rarely exercise because of the rule in WhiteV. City of London Brewery (1889) that a mortagee who takes possession must account
to the mortgagor for any loss to property caused his default.

Suit on Personal Covenant: this is the right of the mortgagee to sue the mortgagor for the amount due. The right is generally exercisable if the mortgagor has executed a personal covenant to repay.
Consolidation: this is the equitable right of a mortgagee in whom several morgages are vested to insist that all the mortgages to redeemed at the same time.
However certain conditions must be fulfilled.
Appointment of receiver: a receiver is treated as an agent of the mortgagor who becomes vicariously liable for his default. It is therefore advisable for the mortagee to appoint a receiver than take possession himself. As his name suggests, the receiver is appointed to receive all the income from the land to repay the loan
after paying rates, taxes prior claims and his own commission. Any balance is payable to the mortgagor.

 

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