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A mortgage is an interest in land which, by treaty, not as loans. Although almost all mortgage agreements included a promise to repay a debt, a mortgage is not one of guilt and of itself. It is better than the evidence debt. More importantly, a mortgage is a transfer of a legal or equitable interest in land, on the conditio sine qua non that the interest is returned if the conditions for the mortgage contract to be carried out. A mortgage agreement transfers in the rule in the interest of the borrower's country for the lender. The transmission is a condition: If the borrower performs the duties of the mortgage contract, the transfer becomes void. That is the reason why the borrower may continue to the title as registered owner . In practice, it retains the ownership of land, but the lender holds the right to the interest in said land.

In essence, therefore, a mortgage is a transfer of land as security for the payment of the underlying claim or the discharge of some other obligation for which it is issued. In a mortgage contract, the borrower is called a "mortgage borrowers and lenders" mortgagee ".

The history of the mortgage law

Mortgage Law comes from the English feudal system is already in the 12th Century. At this time the effect of a mortgage was legally convey both the titles of interest in land and property in the country for the lender. This transfer was "absolute", which is only for the lenders promise to give back to the borrower if the sum was repaid by the specified date

If, on the other hand, the borrower does not comply with the conditions, then the interest in land automatically as lender and the borrower no further claims or submissions to law. There was in feudal England, two main types of mortgages: "Ad-vivum vadium," Latin for "a live pledge" in which the proceeds from the land by the borrower to repay the debt, and "Ad-mortuum vadium, "Latin for" a dead pledge, "if the creditor is entitled to the income from the land and the borrower had to elsewhere means to repay the debt. Whereas at the beginning only "live commitments" were legal and "dead promises" were a violation of the laws of usury and the religious teachings of the 14th Century only dead promises and they were all very legal and very religious. And obviously they are still very religious in the 21st Century.

Express contractual terms of a mortgage

Following is an analysis of the clauses in most mortgage contracts. It should be noted, however, that the wording differs from contract to contract, and the types of clauses amended to conform to certain types of mortgage securities.

[] Redemption

If the mortgage debtor to meet its obligations under the contract, the mortgage is void, and the mortgagee is to reconvey the legal interest for the mortgage borrowers.

[] Transferability

All agreements which the mortgagor is bound by him, his heirs, executors and administrators. This is the case, whether the legal interest of the mortgagee, or by the mortgagee's heirs, executors, administrators or successors.

[] Personal Covenant

The contractual commitment by the borrower's personal covenant. For this reason, it is not compatible with the country, so that the lender the borrower can on his personal federal government, even in the event that the borrower has an interest in land to someone else who has the mortgage. In practice, this means that until the original mortgage contract is valid, in full force and effect of the original mortgagor is always appropriate.

[] Title Integrity

The mortgagor represents and warrants that he is the owner in fee simple and has all the rights and powers that the property contains, including the right to the land to the mortgagee.

[] Free and Clear

This is the essence of security for the debt: The title must be free and free of all charges (subject to certain legal rights, such as taxes), so that the transfer can take place. During the transfer, the interest to the lender while the borrower retains possession. But on the standard, the borrower is in possession of the lender, without any commitment in the foreground. This can be a tax lien or, in case of failure of a second mortgage, a first mortgage.

[] Further Assurances

In the event of insolvency, the mortgage borrowers promise to do everything that is necessary to enable the lender to the title of the property.

[] Prior charges

With the exception of statutory nuisances, the mortgagor must be a statement of all fees, which take precedence over the mortgage contract will be, because otherwise the lender expects and has the right to the first priority.

[] Insurance

The mortgage agreements either the buildings on said land insured at any time or, alternatively, a cash bond for the replacement cost of said building.

[] Release of all claims

The borrower, there may be claims against the lenders in relation to the property, with the exception of the borrowers have the right to ask if the underlying repossession is repaid.

[] Acceleration to standard --

Acceleration is a condition that is the default on the principal and interest of the underlying debt instruments and both are due immediately after the election of the mortgagee.

[] Quiet Possession

A provision that, by default, which mortgage borrowers have quiet possession of the said countries.

[] Omnibus clause

In the absence of a payment of money charged to the mortgagor under the terms of the mortgage contract, the mortgagee can use the same amount and it is paid immediately to the principal debt by the contract and the interest at the same rate, by the Treaty .

[] Repair

The mortgagor has the duty and obligation to the land and the buildings in good condition and this in a reasonable state of repair, and also he will not give up or commit waste on the mortgaged property to. This clause is limited to the value of the lenders security.

[] Advances

The mortgagee is not obliged to allocate a portion of the money will be secured by the mortgage contract. For example, where part of the money was advanced and subsequently a builder's lien is against the country, the lender's lien will be removed before the promotion of further funds. Note that the manufacturer's plate liens have priority over mortgages.

[] Sale Clause

Also known as "Due to the sale of the mortgage debtor agrees to pay to the possibility of the mortgagee, all principal and interest of the underlying debt from the sale of the property. This clause effectively prevents the mortgage is not assumed by each not to the lender. Of course, the other possibility, the lender is not to call the loan if the mortgagor sells to a buyer acceptable to the lender. In the absence of this clause, the mortgage is assumable.

Luigi Frascati

Luigi Frascati is a Real Estate Agent based in Vancouver, British Columbia. He has a bachelor's degree in Economics and maintains a weblog with the title Real Estate Chronicle at http://wwwrealestatechronicle.blogspot.com Below you will find the complete collection of his texts. Luigi is associated with the Sutton Group, the largest real estate companies in Canada, and is equipped with Sutton Realty Center in Burnaby, BC.

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