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What Protection does a Mortgagor has?

It is sometimes said that those who lend money are influenced by profit rather than by service to the community. There is the possibility that the lender of the money may abuse his superior bargaining power. Generally the lending institution has a greater economic capacity than the borrower and therefore is in a better bargaining position.

The borrowers of money tend to lack bargaining power and therefore the law tends to offer greater protection to the Mortgagor.

The legal protection tends to favour the Mortgagor than the Mortgagee. The protection is referred to as the rule against collateral advantage.

The Courts of Equity treat the mortgage instrument only as a security for the repayment of the principal, interest and cost. The Mortgagor is entitled to get back his property as free as he gave it on the repayment of the principal, interest and cost. The rights of the Mortgagor under the Mortgage Act include:

  • He/she must receive notice from the Mortgagee with regard to changes in the interest rate on the mortgage;

  • Although the property may be mortgaged, this does not prevent him/her from selling the propoerty. He/she may simply notify the mortgagee of his intentions;

  • In the event of default he/she is given the right to pay the arrears of principal and interest and cost at any time, before the courts give judgement against him;


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