Land -> Mortgagee's Remedies4

A legal mortgagee has a common law right to posession of the mortgaged property (Four-Mains v Dudley). However in practice a mortgage deed will often provide the mortgagee's right of possession shall only arise on the mortgagors default.

Where a mortgagee brings a claim for possession, this right will be restricted by the Admin of Justice Act 1970, s36. Which is operable only where court proceedings for possesion take place (Ropa v Barclay). So the m'gee right to possession could be exercised by peaceable entry withut court assistance (but regulated under s6(1)) Criminal Law Act 1977 preventing use of threatening behaviour or force).

In practice a m'gee will usually seek possession in order to sell the mortgaged property. The statutory power of sale in LPA 101 arises where the mortgage money has become due (legal date of redemption has passed). Exercisable under one of the three sections of LPA s103.
In exercising a power of sale, a m'gee must take reasonable are to obtain a proper market price for hte property.

In Cuckmere Brick v Mutual Finance the m'gee had failed to obtain the true market value of the property and were liable to the mortgagor in damages. Such a claim must be brought within six years (Raja v Lloyds TSB). M'gee's have a duty in exercising this power of sale in equity. Thus a m'gee needs not carry out any improvements to the property or obtain planning permission (Silven v RBS) but merely duties of good faith and diligence.

However there is no duty on the m'gee to delay power of sale until market conditions are more faourable. Therefore a m'gor may not argue theres been abreach merely because the market value of the property has risen since it was sold (Palk v MSF).

LPA s105 states all proceds of sale must be paid in order of priority of mortgages and any o/s amounts maybe claimed personally.

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).