Mortgage
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Banking basics
A recap of a few things you’d think financial professionals ought to know
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A word about credit risk mitigation
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A sort of security interest — a legal security interest, in fact, that involves transferring legal title, but not beneficial ownership, to property as security for a debt. Your mum and dad probably had one on their house, but have paid it off now.
Mortgages are not just security interests over real estate by the way. any security over a chattel counts. Under the Law of Property Act 1925:
- “Mortgage” includes any charge or lien on any property for securing money or money’s worth; “legal mortgage” means a mortgage by demise or subdemise or a charge by way of legal mortgage and “legal mortgagee” has a corresponding meaning; “mortgage money” means money or money’s worth secured by a mortgage; “mortgagor” includes any person from time to time deriving title under the original mortgagor or entitled to redeem a mortgage according to his estate interest or right in the mortgaged property; “mortgagee” includes a chargee by way of legal mortgage and any person from time to time deriving title under the original mortgagee; and “mortgagee in possession” is, for the purposes of this Act, a mortgagee who, in right of the mortgage, has entered into and is in possession of the mortgaged property; and “right of redemption” includes an option to repurchase only if the option in effect creates a right of redemption;
Formal execution requirements
To benefit from the terms of the Law of Property Act 1925, a mortgage must be executed as a deed. That means it must be “clear on its face” that it is intended to be a deed and it must be “validly executed as a deed”.