Mortgages in English is a method of raising capital through a loan contract, typically with a bank, where the borrower does not repay. Mortgages are an important part of English land law and property law . These concern, first, the common law, statute and regulatory rules to protect the mortgagor (ie the borrower) at the time of the concluding the mortgage agreement. Second, English law defines and restricts the process for taking possession of property in the event of default. Third, it places duties on mortgage (ie lenders, like banks).

Creation of a mortgage

While real property May be divided Among co-owners and tenants for the purpose of the land’s use and enjoyment, Taking a mortgage of property reserves Primarily the purpose of Ensuring loans are repaid. Because of the nature of money lending, and frequently a bargaining power between banks and borrowers, the law provides a legal protection to borrowers against the enforcement of unfair bargains. Along with Pledges, links and equitable loads, English law has mortgage counts as one of four kinds of hand security interest , whereby a proprietary right That Bind third party is Said to Arise is concluding of a contract . It should simply be the intention to make property available to secure repayment. The Law of Property Act, 1925, section 85, is a deed (under LPMPA 1989 section 1, a document that is signed, witnessed and states it is a deed). Under the Land Registration Act 2002 sections 23 and 27, a notice of a mortgage must be filed with HM Land Registry for the mortgage to be effective. Then, Law of Property Act 1925 , section 87 says mortgages confer on the mortgagee (ie the secured lender) the same rights as a 3000-year lease holder. Under the Land Registration Act 2002 sections 23 and 27, a notice of a mortgage must be filed with HM Land Registry for the mortgage to be effective. Then, Law of Property Act 1925 , section 87 says mortgages confer on the mortgagee (ie the secured lender) the same rights as a 3000-year lease holder. Under the Land Registration Act 2002 sections 23 and 27, a notice of a mortgage must be filed with HM Land Registry for the mortgage to be effective. Then, Law of Property Act 1925 , section 87 says mortgages confer on the mortgagee (ie the secured lender) the same rights as a 3000-year lease holder.

Protection of borrowers

Equity of redemption

The reason for this reference to “3000 years” is that in a primitive protective measure, the common law said mortgage terms must always allow the property to be redeemed in the end, when the debt is repaid. In the 18th century decision of Vernon v Bethell [1] Lord Henley LC refused to enforce the conveyance of Vernon’s sugar plantation in Antigua to a deceased London lender, Bethell, when Vernon had trouble repaying, even though some exchanges between the two had raised The land to satisfy the debt. Given the considerable interest already paid, Lord Henley LC held it would frustrate (or “clog”) Vernon’s right to redeem property. As he put it in for the borrower was warranted because ”

Defective consent

Reviews The most under protective measure at common law today is the right of Borrowers to cancel mortgages if They Were misrepresented about the mortgage’s terms, gold If They ENTERED agreements Because of undue influences . In the leading case, Royal Bank of Scotland v. Etridge (No. 2) , a group of appeals all involved a husband allegedly pressuring his wife into signing a mortgage agreement with a bank. [4] The House of Lords agreed that undue influence would make a contract voidable, and if a bank should have realized this possibility, it could not enforce the mortgage agreement against the spouse’s share of the home. Accordingly, If they wished to ensure valid mortgages they would need to have confirmation from an independent solicitor that the spouse fully understood the transaction. This ruling was intended to eliminate cases where people do not understand the consequences of mortgages. Alternatively, if a spouse is still unduly influenced or is misrepresented the facts, he or she will have no recourse against a bank selling the home, but may have a claim against the solicitor for negligence .

Statutory market regulation

Beyond common law, there are three main types of statutory protection. First, the Financial Services and Markets Act 2000 codified a system of licensing for mortgage lenders. The Financial Conduct Authority, a Code of Practice and Enforcement with the Threat of License. Second, the Consumer Credit Act 1974 empowers the Office of Fair Trading to engage in similar regulation of the second mortgage market. Third, the content of mortgage is regulated by ordinary consumer protection in the Unfair Terms in Consumer Contracts Regulations 1999 . The general thrust of the law is to ensure complete transparency, and to cancel extortionate credit agreements,

Lenders’ rights

Money lenders have extensive rights from common law and statute. A mortgagee’s first right is to repayment of the debt, but if the borrower’s circumstances mean this is impossible, a process of taking possession of the mortgaged property and selling it usually begins. Almost every step, however, is mediated through short.

Defaults on repayment

The Administration of Justice Act 1970 Section 36 says que le short May adjourn proceedings if the “mortgagor is Likely to be reliable Within a reasonable period to pay Any sums due [5] from under the mortgage”, and the Consumer Credit Act 1974 sections 129- 130 does the same for second mortgages. In an anomalous case, Ropaigealach v Barclays Bank plc [6] a bank had auctioned off a (second) house the owning a family was away. Clarke LJ was not able to apply the AJA 1970, because it was properly constructed, it was only able to halt proceedings when legal. In a more borrower-friendly decision, Cheltenham &

Duties during sale

When it comes to a sale, Law of Property Act 1925, sections 101 and 103 require that the provision for sale must have been in the mortgage deed, that three months notice and space must be given. Section 88 confirms that a buyer has an unencumbered title. In the sale process itself, there is a duty of care. In Cuckmere Brick Co v Mutual Finance [8] Mutual Finance auctioned Cuckmere Brick Co’s property after it had defaulted on a loan, but failed to advertise that the property had permission for building more flats. Salmon LJ emphasized that because the borrower would still be liable for a mortgage, the mortgagor is vitally affected by the result of the sale, an obligation is owed to get the true market value. Moreover, a higher duty of scrutiny will be imposed if a mortgagee sells to a related party. In Tse Kwong Lam v Wong Chit Sen [9] Mr Wong sold property taken from Mr Tse to his wife, after not advertising the auction. The privy council should not be allowed to stand aside, because it could be awarded because of the significant conflict of interest . Lord Templeman emphasized that “a heavy onus lies on the mortgage to show that in all respects he acted fairly” so the transaction is perfectly fair and equal. [10] In Tse Kwong Lam v Wong Chit Sen [9] Mr Wong sold property taken from Mr Tse to his wife, after not advertising the auction. The privy council should not be allowed to stand aside, because it could be awarded because of the significant conflict of interest . Lord Templeman emphasized that “a heavy onus lies on the mortgage to show that in all respects he acted fairly” so the transaction is perfectly fair and equal. [10] In Tse Kwong Lam v Wong Chit Sen [9] Mr Wong sold property taken from Mr Tse to his wife, after not advertising the auction. The privy council should not be allowed to stand aside, because it could be awarded because of the significant conflict of interest . Lord Templeman emphasized that “a heavy onus lies on the mortgage to show that in all respects he acted fairly” so the transaction is perfectly fair and equal. [10]

Further sources

  • First National Securities v Hegerty [1985] QB 850
  • Cityland and Property (Holdings) Ltd. v Dabrah [1967] 2 All ER 489
  • Multiservice Bookbinding Ltd v Marden [1978] 2 All ER 489
  • Davies v Directloans [1986] 2 All ER 783
  • Ketley v Scott [1981] ICR 241
  • Woodtsead Finance v Petrou [1986] CCLR 47
  • Samuel v Jarrah [1904] AC 323, equity of redemption
  • Reeve v Lisle [1902] AC 461
  • Biggs v Hoddinott [1898] 2 Ch 307
  • Noakes & Co Ltd v Rice [1902] AC 24
  • Bradley v Carritt [1903] AC 253
  • Kreglinger v New Patagonia Meat Ltd [1913] UKHL 1
  • Esso Petroleum v Harper’s Garage [1965] AC 269
  • Crehan v Entrepreneur Pub Co [2006] UKHL 38
  • Four-Maids Ltd v. Dudley Marshall Properties [1957] Ch 317, taking possession
  • Western Bank v Schindler [1976] 2 All ER 393
  • Administration of Justice Act 1970 ss 8 and 36
  • Halifax B. Soc. V Clark [1973] Ch. 307:
  • Habib Bank Ltd v Tailor [1982] 1 WLR 1218
  • Bristol & West BS v Ellis (1996) 73 P. & CR 158
  • National and Provincial BS v Lloyd [1996] 1 All ER 630
  • Law of Property Act 1925 ss 101, 103-107, selling property
  • Law of Property Act 1925 s 101
  • Land Registration Act 2002 s 48
  • Law of Property Act 1925 ss 88 (2), 89 (2), 91
  • Cityland and Property (Holdings) Ltd. v Dabrah
  • CICB Mortgages plc v Pitt [1993] UKHL 7
  • Barclays Bank plc v Rivett (1997) 29 HLR 893
  • Massey v Midland Bank plc [1995] 1 All ER 929
  • Alliance & Leicester plc v Slayford [2001] 1 All ER 1
  • Bristol and West plc v Bartlett [2002] 4 All ER 544
  • West Bromwich Building Soc v Wilkinson [2005] UKHL 44

See also

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  • v
  • t
  • e
Sources on mortgages
  • English land law
  • English property law
  • Mortgage Industry of the United Kingdom
  • Mortgage law
  • Security interest

Notes

  1. Jump up^ (1762)28 ER 838
  2. Jump up^ Seton v Slade (1802) 7 Ves 265, 273
  3. Jump up^ [2001]EWCA Civ 995
  4. Jump up^ [2002] 2 AC 773
  5. Jump up^ Administration of Justice Act 1973s 8 was enacted to prevent banks using “acceleration” provisions, saying all sums would be due to the date of default.
  6. Jump up^ [2000] QB 263
  7. Jump up^ [1996] 1 WLR 343
  8. Jump up^ [1971] Ch 949
  9. Jump up^ [1983] 3 All ER 54
  10. Jump up^ See also York Buildings Co v MacKenzie (1795) 3 Paton 378

References

  • JC Coffee, ‘What went wrong? An initial inquiry into the causes of the 2008 financial crisis’ (2009) 9 (1) Journal of Corporate Law Studies 1