If the property is sold, he/she is entitled to any surplus after the mortgagee retires the debt, along with legal fees and other expenses.
What Safeguards the Mortgagee Conveyance and Law of Property?
The Mortgagor also may not postpone the date of redemption and should not default on the mortgage repayment. The Courts are very reluctant to grant relief for that kind of conduct.
There are certain essential safeguards and remedies, which are maintained on behalf of the Mortgagee on the security of real property. These safeguards are stated in the mortgage document in the form of a borrower’s covenant. These safeguards include: -
Covenant to provide marketable title - the borrower has to provide good title for the property (Fee Simple Estate);
Covenant to provide for Fire and Peril Insurance – the borrower has to provide adequate security from all risk on the property until maturity of the loan;
Covenant to maintain property against loss of Value – the borrower has the obligation to maintain the property in optimum conditions;
Covenant to protect against sale by government for property taxes and assessments – the borrower has to pay all land and house taxes and all other taxes or assessments in respect to the property.