Land -> Mortgagee's Remedies3

The whole purpose of amortgage is to provide security which the mortgagee can release if the mortgagor fails to repay the loan.

Foreclosure
When a borrower can not repay a loan and the lender seeks to sell the property. The legal process by which the mortgagor's equitable/statutory rights to redeem property is terminated.

• Forclosure can not besought before contractual obligations to repay has been broken (Williams v Morgan).
• A court order is required for foreclosure, its effect is to vest the mortgagor's estate in the mortgagee in ful settlement of debt (LPA 1925, s88(2) & 89(2))
• If the property is worth more than the debt, the m'gee is not liable to pay the balance in value to the m'gor.
• On hearing an application for forclosure the court will give the m'gor a period to redeem the mortgage. However since m'gor usually in financial difficulty therefore unable to repay the loan.
• M'gor has right to ask for an order for sale instead of foreclosure (LPA s91(2)). This is advantagous because after sale the m'gee can only keep the sum for debt while the remainder goes to the m'gor or others entitled.
• Disadvantage to the m'gor, as even after an order for foreclosure has been given, the case can be reopened and allow m'gor to redeem property (Campbell v Holyland); provided critera are: Speed of mortgagors application, reason for failure to redeem and nature of property. UNLESS property already sold by m'gee.

Possession
Although the m'gee hass the right to possession, the m'gee will not nomrally exercise hte right where the borrower has not defaulted (Exp Bignold).
Requires a court order (Barclay Bank v Bird). Although theoretically they do NOT need one, acording to the article by Wade (1995).