what is a mortgage?
a contract between mortgagor and mortgagee
mortgagor
person taking the money
mortgagee
bank/lender of money
promises of a mortgagor
- pay back the principal and interest at an agree upon time interval
- pay back all land taxes (municipal taxes)
- insure thier property
- look after property
Promises of a mortgagee
- pay the mortgagor the money at the determined time
- discharge the mortgage when fully paid (leave alone)
- give the mortgagor quiet use and enjoyment of the land
Where is a registry system found?
eastern Canada
what is a registry system
transfer of title, once paid the payments by mortgagor’s
where is a Torrance system found
BC
what is a Torrance system
you do not have to give the mortgagee the title of your land, just a registered claim
What is a Second Mortgage?
A contract, very similar to the first mortgage, but you give a second charge on your land
Remedies for Default on a Mortgage?
- Sue for Breach of Contract
- foreclosure
- judicial
how does foreclosure work?
Mortgagee goes to court + ask to close mortgagors rights in the land.
Process:
- Order Nisi (future order)
- Wait 6 months
- goes back to court and ask for Order Absolute
Order Absolute
owner of the land goes from mortgagor to mortgagee
Judicial
Court orders that the house be sold.
If the house is sold:
- all of the costs to first mortgagee will be satisfied
- then second mortgagee will be paid
- leftover is given back to the mortgagor
Why do financial institutions want judicial?
- Don’t want to be in the home-owner industry
- fast
- Can sell the house, but mortgagees are not satisfied, then they can file a lawsuit for the remaining money owed
