7 types of mortgages mortgages legal mortgages

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Unformatted text preview: nsaction in which an interest in land is given as security for the repayment of money lent. If the borrower defaults, the lender has rights against the land, the main right being the right to sell the land and recover the outstanding balance of the loan from the proceeds of sale. Mortgages can be classified as legal mortgages or equitable mortgages (see Figure 33.7). CHAPTER 33 33.4 869 C04 Define a mortgage BUSINESS ORGANISATIONS AND THE LAW PART 6 870 FIGURE 33.7 Types of mortgages Mortgages Legal mortgages Equitable mortgages Legal mortgages A mortgage recognised by both common law and equity, a legal mortgage achieves this status because the parties have satisfied all the formalities and other requirements of both common law and equity. In the case of a mortgage under common law title, this means executing a deed of mortgage conveying the land to the mortgagee. In the case of land under the Torrens system, it means registration of the mortgage. Equitable mortgages Equitable mortgages give the lender an interest recognised by equity, but not by common law. They ari...
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This document was uploaded on 04/23/2012.

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