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banker, property, deeds and mortgagor

MORTGAGE. (From mort, dead, and gage, a pledge.

A mortgage is a charge which a borrower gives to a lender upon a part or the whole of his property.

For example, if Brown borrows from Jones the sum of /100 and, as security for the loan, conveys to him the fee simple of a piece of land, it is called a mortgage, the conveyance being given on condition that if Brown, the mortgagor, repays the /100 and interest to Jones, the mortgagee, he shall have the estate re-conveyed to him.

There are two kinds of mortgages : 1. Legal Mortgage (q.v.).

2. Equitable Mortgage (q.v.).

A legal mortgage forms part of the chain of title and must be preserved along with the other deeds. A memorandum of deposit, however, when done with, is cancelled, as it does not form a link in the title.

With a legal mortgage a banker has control of the property if the borrower fails to repay the advance made to him. But with an equitable mortgage—that is, a deposit of the title deeds with, as a rule, a memorandum of deposit—the banker will, unless the borrower gives a legal mortgage when re quested, be at much trouble and expense before he obtains the sanction of the Court to dispose of the property. Any charge after the first mortgage is merely an equitable mortgage.

Where a banker takes a charge, which is subject to a prior mortgage, he should give notice of his charge to the prior mortgagee.

(See TACKING.) If a mortgagee deposits his mortgage, and the relative deeds, with a banker as security for a loan, he can charge it only to the extent of the mortgage debt. For example, if John Brown, who holds a mortgage deed from Jones for /500 upon property valued at /1,500, deposits the mortgage and the deeds relating to the property with his banker for an advance, the security is not worth more than /500 to the banker because that is the extent of Brown's interest in the property. In such a case the banker should give notice to the mortgagor that the mortgage deed has been deposited with him as security. When the mortgagor receives the notice, it warns him not to repay the loan to the mort gagee without the banker's consent. All reductions in the amount of the mortgage debt should be made direct to the banker by the mortgagor, and as reductions may have been made before the deeds came into the banker's hands, an acknowledgment should be obtained from the mortgagor as to the exact amount which is still due.

Mortgages and charges created by companies must now be registered. (See