Legal morgages/ third party right structure
Remedies:
1. Identify the lender’s aims. Does it just want to recover arrears or does it
want the entire loan repaid? Select only relevant remedies on the facts
provided.
2. For each remedy you have chosen to discuss, check that the remedy is
available to the mortgagee.
In registered land:
1. rights created after the date of registration of the mortgage without the mortgagee’s
consent will not bind the mortgagee or any buyer from the mortgagee;
2. rights created before the mortgage will bind the mortgagee and any buyer from the
mortgagee if:
3. the interest is registerable at the Land Registry and it is registered by the date of
registration of the mortgage;
4. the interest is protected by Schedule 3 of the LRA 2002 and it is in existence by the date
of creation of the mortgage.
Example recovering debts
Do this if the question looks like this:
The mortgagee’s remedies and protections for borrowers
You act for Mr and Mrs Thompson. Mr and Mrs Thompson took out a 25 year loan secured on
their home. Their mortgage is with Kirby Bank and the term has about 10 years left to run. The
amount outstanding on the loan is £160,000. The Thompsons have failed to pay the
mortgage installments for the last three months. Mrs Thompson was made redundant
four months ago, but she has recently had a job interview and she is hopeful that she will be
back in work in a month’s time. Mr Thompson is at home with their two young children. They
have fallen into arrears twice before, but on those occasions they managed to catch up. The
property is currently worth approximately £250,000.
Mr and Mrs Thompson have come to see you as they are worried that they may lose their
home.
(a) Advise Mr and Mrs Thompson on the remedies available to Kirby Bank
to recover all the sums owed under the mortgage.
(b) Are there any provisions which may protect Mr and Mrs Thompson from losing their
home?
Remedies:
1. Identify the lender’s aims. Does it just want to recover arrears or does it
want the entire loan repaid? Select only relevant remedies on the facts
provided.
2. For each remedy you have chosen to discuss, check that the remedy is
available to the mortgagee.
In registered land:
1. rights created after the date of registration of the mortgage without the mortgagee’s
consent will not bind the mortgagee or any buyer from the mortgagee;
2. rights created before the mortgage will bind the mortgagee and any buyer from the
mortgagee if:
3. the interest is registerable at the Land Registry and it is registered by the date of
registration of the mortgage;
4. the interest is protected by Schedule 3 of the LRA 2002 and it is in existence by the date
of creation of the mortgage.
Example recovering debts
Do this if the question looks like this:
The mortgagee’s remedies and protections for borrowers
You act for Mr and Mrs Thompson. Mr and Mrs Thompson took out a 25 year loan secured on
their home. Their mortgage is with Kirby Bank and the term has about 10 years left to run. The
amount outstanding on the loan is £160,000. The Thompsons have failed to pay the
mortgage installments for the last three months. Mrs Thompson was made redundant
four months ago, but she has recently had a job interview and she is hopeful that she will be
back in work in a month’s time. Mr Thompson is at home with their two young children. They
have fallen into arrears twice before, but on those occasions they managed to catch up. The
property is currently worth approximately £250,000.
Mr and Mrs Thompson have come to see you as they are worried that they may lose their
home.
(a) Advise Mr and Mrs Thompson on the remedies available to Kirby Bank
to recover all the sums owed under the mortgage.
(b) Are there any provisions which may protect Mr and Mrs Thompson from losing their
home?
