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Remedies Of The Mortgagee Notes

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This is an extract of our Remedies Of The Mortgagee document, which we sell as part of our Land Law Notes collection written by the top tier of Oxford students.

The following is a more accessble plain text extract of the PDF sample above, taken from our Land Law Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

Remedies of the Mortgagee:

1. Foreclosure

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Traditional right of mortgagee is to ask the court to put end to equitable right to redeem o This is inapplicable until after the legal date for redemption has passed o And mortgagor normally has six months to pay off the mortgage

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Smith: However, power is rarely exercised these days o If property is worth more than the debt, than it is more advantageous that the mortgagee sell the property
? Which will ensure that the debt and other expenses are paid off

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With the remaining balance given to the mortgagor o If property is worth less than the debt
? Then foreclosure will bar the mortgagee from claiming anything more than the value of the property sold from the mortgagor

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Because the mortgagor has lost the right to redemption o The mortgagee will lose the right to sue for the balance of the debt
? And the value of the property will have to suffice.

2. Possession

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The mortgagor's possession o Mortgagees can technically take possession immediately after mortgage agreed
? But mortgagors will generally be in possession

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Thus, where possession is sought or taken, the mortgagor must be allowed the opportunity to redeem

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Smith: regardless, possession not normally taken until default b/c point of taking possession is to exercise power of sale
- which isn't available until default. Court's jurisdiction to postpone possession under common law

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Birmingham Citizens BS v Caunt [1962]
o Russell J:
? Where mortgagee is entitled to possession by reason of default of mortgagor -and the whole money has become payable -

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The court has no jurisdiction to decline to make the order or to adjourn the hearing.
? The sole exception is where a short adjournment would afford the mortgagor a chance to pay off the mortagee in full or otherwise satisfy him;

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but it should not be done if there is no reasonable prospect of this occurring

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Quennell v Maltby [1979]: wife of mortgagor bought mortgage from bank, tried to use it to evict tenants by taking possession when bank had previously refused to do so. o Lord Denning:
? Equity should be able to step in and restrain a mortgagee from getting possession unless it is

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bona fide

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and is reasonably for the purpose of enforcing the security o Not for any ulterior motive as in the present case.

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