Question 1

The right of the mortgagee,given by a statute or the terms of the mortgage,to sell the property upon default is called

Accepted Answer

The right to sell the property upon default is specifically referred to as a power of sale. This power is given to the mortgagee (lender) by the terms of the mortgage or by statute. An equitable sale or equitable right to sell generally refers to a sale that is done by a court or other equitable process. A legal sale could refer to a power of sale, but it is a broader term that could mean any sale that conforms to legal requirements. A sale by court is a specific process that involves a court order to sell a property, which is different from a power of sale.

Question 2

Use the fact situation in Q1 to answer the related question that follows. Based on the date and time of registration of each of the two mortgages,assume that six months after the registration of the mortgages,George defaults on the TD Canada Trust mortgage and that his house is now worth $600 000.00.On a sale of the house by TD Canada Trust,the Royal Bank would receive

Accepted Answer

E

Question 3

A mortgagee is

Accepted Answer

A mortgagee is a secured creditor as they have a security interest in the property that is mortgaged. If the borrower defaults on their mortgage payments, the mortgagee has the right to foreclose on the property and sell it to recover the amount owed. This makes their claim to repayment more secure than that of an unsecured or general creditor.

Question 4

An order by a court that ends the right of the mortgagor to redeem the mortgage within a fixed time is called

Accepted Answer

A foreclosure is a legal process by which a lender takes possession of a property from a borrower who has defaulted on their mortgage payments. The court order in a foreclosure ends the right of the mortgagor (borrower) to redeem the mortgage within a fixed time, effectively ending their ownership of the property.

Question 5

Mary is buying a home for the first time.She has $200 000.00 in her bank account and has been pre-approved for a $100 000.00 mortgage.Mary now finds a house priced at $300 000.00 and based on her calculation of the money in her account and the pre-approved mortgage,she enters into an agreement of purchase and sale for it with its owner.In this case,

Accepted Answer

The answer of Mary is buying a home for the...

Question 6

On receipt of an agreement of purchase and sale from a purchaser of property,the first thing a prudent lawyer should do is

Accepted Answer

The answer of On receipt of an agreement of purchase...

Question 7

Under the registry system,when a first mortgagee gives a discharge of its mortgage to the mortgagor,the effect of the discharge if registered is to

Accepted Answer

When a first mortgagee gives a discharge of its mortgage to the mortgagor and the discharge is registered, it has the effect of reconveying legal title of the land to the mortgagor, acknowledging that the mortgage debt has been paid in full, and acting as a cancellation of the encumbrance on the land. Additionally, it brings all rights and remedies of the mortgagee to an end. Therefore, all the options are correct and the best choice is E.

Question 8

Use the fact situation in Q1 to answer the related question that follows. Assuming that both the Royal Bank and the TD Canada Trust mortgage were registered on title to George's home,the equity in the home would be

Accepted Answer

The answer of Use the fact situation in Q1 to...

Question 9

Use the fact situation in Q1 to answer the related question that follows. Given the time of registration of the Royal Bank and the TD Canada Trust mortgages,

Accepted Answer

The TD Canada Trust mortgage was registered before the Royal Bank mortgage, which means it has priority or is senior to the Royal Bank mortgage. Therefore, the TD Canada Trust mortgage is a first mortgage.

Question 10

Use the fact situation in Q1 to answer the related question that follows. Assuming that the Royal Bank mortgage was to be a first mortgage,in Ontario,

Accepted Answer

A mortgage in Ontario would simply be a lien or encumbrance on title to George's home, giving the Royal Bank the right to sell the property to satisfy the debt in the event of default, but it would not transfer legal or equitable title to the bank. The equity in George's house and the equity of redemption would still belong to George.

Question 11

A mortgage that permits repayment of the debt at any time without notice or penalty is called

Accepted Answer

An open mortgage allows the borrower to repay the mortgage at any time without notice or penalty. The other options either have restrictions on repayment or are unrelated to repayment terms.

Question 12

Use the fact situation in Q1 to answer the related question that follows. Assume that George comes into an inheritance and pays off the TD Canada Trust mortgage in full.TD Canada Trust will give George

Accepted Answer

TD Canada Trust will give George a discharge of its mortgage. This means that the mortgage will be released and George will no longer be obligated to make any payments towards it.

Question 13

Use the fact situation in Q1 to answer the related question that follows. Given the date and time of registration of the Royal Bank and the TD Canada Trust mortgages,if George defaults in payment of the TD Canada Trust mortgage,TD Canada Trust can

Accepted Answer

The answer of Use the fact situation in Q1 to...

Question 14

George owns an acre of land and severs,or divides,it into building lots.Before George can build on the lots he requires money to finance the construction costs,so he goes to his bank and gets first mortgage financing in the amount of $1.5 million and the bank registers the mortgage on all the building lots.If George finishes construction on one building lot,sells it,and pays down the bank's mortgage,the bank will give George

Accepted Answer

Since the bank has registered the mortgage on all the building lots, they will only release the mortgage on the lots that have been paid off. Therefore, George will only receive a partial discharge of the mortgage for the specific building lot that he has paid off.

Question 15

Use the fact situation in Q1 to answer the related question that follows. The term or phrase used to describe the position or rank of the Royal Bank and TD Canada Trust mortgages on title based on the time of registration is

Accepted Answer

The term used to describe the position or rank of mortgages on title based on the time of registration is priority. In this case, the first registered mortgage (Royal Bank) would have priority over the second registered mortgage (TD Canada Trust).

Question 16

Use the fact situation in Q1 to answer the related question that follows. If only the Royal Bank mortgage were registered on title to George's home,based on what was on title,the equity of redemption in George's home would be

Accepted Answer

The equity of redemption in George's home would be the value of the home ($1,000,000.00) minus the amount of the registered mortgage ($550,000.00) which equals $450,000.00.

Question 17

Use the fact situation in Q1 to answer the related question that follows. Based on date and time of registration,if the property is worth $200 000.00 and George defaults on the Royal Bank mortgage and the bank immediately brings foreclosure proceedings,

Accepted Answer

Since TD Canada Trust registered their mortgage before Royal Bank, their mortgage has priority over Royal Bank's mortgage. Therefore, if Royal Bank forecloses on the property, they will only obtain title to the property subject to the prior TD Canada Trust mortgage. They will not be able to cut out TD Canada Trust's interest or obtain enough money from the sale to pay off their mortgage.

Question 18

Which of the following is NOT a covenant of the mortgagor?

Accepted Answer

A discharge of the mortgage is the responsibility of the mortgagee (lender), not the mortgagor (borrower).

Question 19

A lender who accepts an interest in land as security for a loan is called

Accepted Answer

A mortgagee is a lender who accepts an interest in land as security for a loan through a legal document called a mortgage. The mortgagor is the borrower who pledges the property as security for the loan. The term "insured" is not relevant in this context. A pledgor is someone who places personal property as security for a loan, not real property like land. "Lender" is a generic term that can refer to any party who lends money, but "mortgagee" specifically refers to a lender who has taken an interest in land as collateral.

Question 20

Use the fact situation in Q1 to answer the related question that follows. Based on the date and time of registration of the Royal Bank and the TD Canada Trust mortgages,if George defaults in payment of the Royal Bank mortgage,

Accepted Answer

Since the Royal Bank mortgage was registered first, it holds the first priority or "first charge" on the property. If George defaults on the Royal Bank mortgage and the Bank sells his house, it must use the proceeds of the sale to pay off the TD Canada Trust mortgage first before keeping the rest of the money. TD Canada Trust holds the second priority or "second charge" on the property.

Quiz 23: Mortgages of Land and Real Estate Transactions