A mortgagee in possession is a lender who has exercised its right to take control of a property due to nonpayment of the mortgage. The mortgagee (lender) owns the home, and can sell it or take any other action they wish to recoup the money lost by the mortgagor (borrower) who failed to repay the mortgage.
What happens in a mortgagee sale?
A mortgagee sale happens when a person can’t pay back money they owe to the bank. The bank sells their property to get back the money it’s owed.
Is a bank a mortgagee or mortgagor?
The mortgagee is basically the bank that gave you a mortgage, and you are the mortgagor. Technically, the bank or lending institution is the legal owner of your home until you pay off your loan. The mortgagee can seize your home in the event you default.
Can a mortgagee sell the property?
The mortgagee can simply withhold its consent and thereby, prevent the mortgagor from selling the property. This creates an unconscionable advantage for the mortgagee and amounts to a virtual prohibition on the owner to sell his mortgaged property.
What are your legal obligations for a mortgage?
Understanding Your Obligations in relation to Mortgages – Mortgagor Perspective. A mortgage is an agreement that sets out the conditional right of ownership of a property or asset by its owner (the mortgagor) to a lender (the mortgagee) as security for a loan. When the loan is repaid in full, the lender’s security interest is voided.
What are the rights and obligations of a mortgage in New Zealand?
While the rights of mortgagees are extensive in order to ensure that their interest is protected, at the same time the law requires that they comply with strict limitations and procedures in dealing with the mortgagor’s property. The rights and obligations of mortgagees are found in the NZ PROPERTY LAW ACT 2007.
Who is the mortgagor in a mortgage loan?
A mortgagee is an entity that lends money to a borrower for the purpose of purchasing real estate. In a mortgage lending deal the lender serves as the mortgagee and the borrower is known as the mortgagor.
What happens when a mortgagor fails to honour his obligations?
When a mortgagor fails to honour his or her obligations (for example, failing to make a payment due under the mortgage), you as mortgagee cannot exercise the remedies of taking possession of or selling the property unless you first serve the mortgagor with the appropriate notice under the PROPERTY LAW ACT 2007. This notice must set out:
