An Understanding Of Residential Mortgage Law For Protection Of Property
A residential mortgage is a security document for the repayment of loan
. The mortgagor/borrower, who takes the loan, needs to convey the property papers to the lender/mortgagee who gives the loan. The purpose of giving mortgage is that, if the mortgagor fails to return the mortgage money, then as per the residential mortgage law, the mortgagee has the legal right to foreclose the property for sale and repay himself.For example suppose you have taken loan of $50,000 and in the security, you have mortgaged your house worth of $150,000. So, your mortgagee has still surplus value of $100,000. According to residential mortgage law, it is an equitable estate i.e. equity of redemption. If the mortgagor does not pay regularly, mortgagor can sell or lease the property. Additionally, he can also mortgage it. Likewise, there could be number of mortgages.
However, before selling the property of mortgagor, mortgagee must send a legal notice. With the legal notice, mortgagee also has to provide reasonable time period for the payment. The mortgagor has to pay the entire amount and bear the cost of foreclosure proceedings to save the property. Once the mortgagor pays the entire amount, the lender is obliged to discharge the mortgage property and maintain the record that it cleared the title of the property.
As per the mortgage law, the mortgagor has two legal rights to redeem his/her property. The first one is contractual right as per the date specified in the deed and second is the equitable right to redeem after the payment of the loan and its interest. The right of borrower on his property remains protected until the date fixed in the mortgage has not expired. But once the date expires, the mortgagee gets the right of foreclosure. Foreclosure is a legal action to recover the loan amount.
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