1. Types
   1. Legal mortgage
      1. s85 LPA 1925
         1. a. demise for a term of years absolute subject to a provision for cessor on redemption
            1. 3000 year lease ends when repaid
            2. borrower keeps fee simple
            3. mortgage is incumbrance over fee simple
         2. b. charge by deed expressed to be by legal mortgage (or legal charge)
            1. does not convey legal estate to lender
      2. s87 LPA 1925
         1. lenders have same remedies under b as under a
      3. LRA 2002
         1. Method a is no longer possible for registered titles
      4. Unregistered titles
         1. s85(1) LPA 1925
            1. lender takes custody of title deeds
         2. second mortgage is puisine mortgage
            1. protected by Class C(i) land charge against borrower's name
      5. Registered titles
         1. Mortgage must be registered to bind the land
         2. Notice on charges register
   2. Equitable mortgage
      1. Contract to create a mortgage
         1. s2 LP(MP)A 1989
            1. in writing
            2. contains all terms
            3. signed by both parties
      2. Deposit of title deeds
         1. Could be created without any documents being signed
         2. Treated as contract to create mortgage
         3. Must now be in writing
            1. s2 LP(MP)A 1989
      3. Unregistered titles
         1. Class C(iii) land charge
            1. or void against purchaser for valuable consideration
      4. Registered titles
         1. Notice in charges register
            1. or void purchaser for valuable consideration
2. Borrowers' rights
   1. Redemption
      1. Historically, six months after creation
      2. Can be delayed
         1. Knightsbridge Estates Trust v Byrne [1939]
         2. unless oppressive or unconscionable
            1. Fairclough v Swan Brewery Co [1912]
            2. lease expired six weeks before redemption
            3. illusory right to redeem
      3. Should be no clog or fetter
         1. eg lender has option to buy mortgaged land
         2. Samuel v Jarrah Timber & Wood Paving Corp [1904]
            1. rule applied although considered outdated
3. Human rights
   1. HRA 1998
      1. Incorporates ECHR into UK law
      2. s6(1)
         1. Public authorities cannot act in a way incompatible with Convention rights unless required by statute
            1. Claim must be made against public authority
            2. Claimant needs to be a 'victim'
      3. s3
         1. Legislation must be read as compatible so far as possible
   2. ECHR
      1. Article 6
         1. right to a fair and public hearing
      2. Article 8
         1. respect for private and family life and home
            1. interference permitted in accordance with law and necessary for national security, public safety, economic well being of country, prevention of disorder and crime, protection of health and morals and protection of rights and freedoms of others
      3. Article 14
         1. prohibits discrimination
      4. Article 1 of First Protocol
         1. peaceful enjoyment of possessions
   3. Principles
      1. Margin of appreciation
      2. Proportionality
      3. Legitimate aim
   4. Remedies
      1. Damages
      2. Declaration of incompatibility
4. Possession
   1. If not leased, can take physical possession
   2. If leased, direct that tenants pay rent to mortgagee
   3. Cannot use or threaten violence
      1. s6 Criminal Law Act 1977
      2. so likely to obtain court order
   4. Can take possession as soon as mortgage completed
      1. Birmingham Citizens Permanent BS v Caunt [1962]
      2. Mortgage deed may expressly or impliedly delay until in default
   5. Postponing possession
      1. Common law
         1. Favours lender
            1. May delay if lender agrees
            2. Or up to 28 days if lender has reasonable chance of repaying
      2. Equity
         1. More protective of borrower
         2. Wide equitable discretion
            1. Only where bona fide and acting reasonably to protect security
            2. Quennell v Maltby [1979]
            3. Will allow where in default
      3. Statute
         1. Report of the Committee on the Enforcement of Judgement Debts 1969
            1. Payne Committee
         2. s36 Administration of Justice Act 1970
            1. Applies to land containing dwelling house
            2. Applies to instalment and non-instalment mortgages
            3. Court can postpone possession to give mortgagor time to pay
            4. reasonable period
            5. for full term of mortgage if property still adequate security
            6. C&G BS v Norgan [1996]
            7. shorter if prices likely to fall
            8. B&W BS v Ellis (1996)
            9. Problems
            10. only where lenders sought court order
            11. Ropaigealach v Barclays Bank [1999]
            12. not where lender issued foreclosure proceedings
            13. resolved by AJA 1973
            14. whole amount may become due on default
            15. s8 AJA 1973
            16. Need only pay back arrears, not whole debt
            17. must be reasonable chance can repay
            18. Conditions
            19. Includes dwelling house
            20. borrowers entitled to pay in instalments, or defer
            21. provision made for earlier payment in event of default
            22. Problems
            23. Habib Bank Ltd v Tailor [1982]
            24. sums not due until demanded
            25. did not apply
            26. Standard endownment mortgages often state not due until notice given
            27. Less likely to apply to banks than BS
            28. When not in default
            29. also applies
            30. Western Bank Ltd v Schindler [1977]
   6. Receiver
      1. May be appointed to manage mortgaged property after possession
         1. will either sell or manage property
      2. May have implied power to appoint if not in mortgage deed
         1. s101(1)(ii) LPA 1925
      3. Must wait for legal date for redemption
      4. Profits from property
         1. s109 LPA 1925
            1. outgoings on property
            2. insurance premiums and own costs
            3. interest on overdraft
            4. capital if bank agrees
            5. balance to mortgagor
      5. Medforth v Blake [1999]
         1. if do carry on the business, must take reasonable steps to do so profitably
5. Foreclosure
   1. Effect
      1. vests ownership of the property in the lender
      2. no claim over remaining funds
      3. courts have discretion to re-open foreclosure
   2. Process
      1. after legal date for redemption
      2. stage 1: interim court order
         1. sets final date for redemption
      3. stage 2: foreclosure absolute
         1. cannot redeem unless court exercises discretion
   3. s91(2) LPA 1925
      1. any person with interest in redemption can apply to court for order for sale
      2. court can order sale 'on such terms as it thinks fit'
   4. Law Commission
      1. has recommended abolition
6. Sale
   1. s101 LPA 1925
      1. Legal mortgages only
      2. Power to sell arises after legal date for redemption
   2. s103 LPA 1925
      1. Power becomes exercisable
         1. lenders have served notice requiring repayment and borrowers have failed to comply for 3 months
         2. interest is 2 months in arrears
         3. borrowers have breached a term
      2. May be modified in mortgage terms
      3. Mortgagor may sue mortgagee if sold before becomes exercisable
         1. s104(2)
   3. s104 LPA 1925
      1. Purchaser must check power of sale has arisen
         1. Will aquire good title even if right of sale was not exercisable
            1. Unless she knew of this
   4. Priority if more than one mortgage
      1. Unregistered land
         1. Order created
         2. if property protected by Class C(i) land charge
         3. If mortgage not protected, subsequent mortgagee takes free
      2. Registered land
         1. All mortgages will appear in charges register
         2. Order they appear on register
         3. If not registered, subsequent mortgagee takes priority
   5. Proceeds of sale
      1. s105 LPA 1925
         1. Seller must discharge prior encumbrances which are not to bind purchaser
            1. i.e. prior mortgages
         2. Pay costs and expenses
         3. Discharge her mortgage plus interets and costs
         4. Pay off subsequent mortgagees
         5. Balance goes to mortgagor
      2. LRA 2002
         1. Seller must search register of title for later charges