Mortgage in Europe

Definition of Mortgage

(Norman -French, Mort, dead, and yaye, a pledge, from low Latin, vadium.) A mortgage originally denoted a pledge of land under which the creditor took the rents and profits for himself, so that it was dead or profitless to the debtor, as opposed to a pledge under which the rents and profits went in reduction of the debt (vif gage, vadium vivum).
A legal mortgage is a transfer of a legal estate or interest in land or other property for the purpose of securing the repayment of a debt. An equitable mortgage is one which passes only an equitable estate or interest, either (1) because the form of transfer or conveyance used is an equitable one, that is, operates only as between the parties to it, and those who have notice of it, e.g., a deposit of title deeds, or (2) because the mortgagor’s estate or interest is equitable, that is, consists merely of the right to obtain a conveyance of the legal estate.
Prior to 1926 a mortgage was ordinarily effected by an absolute conveyance, followed by a proviso for redemption, by which the mortgagee agreed to reconvey the property to the mortgagor on payment of the debt and interest by a certain date. Formerly, if the money was not paid on the day, the mortgage became irredeemable at common law, but the mortgagor had an equity of redemption until foreclosure or sale. The right of foreclosure entitled the mortgagee to compel the mortgagor either to pay off the debt within a reasonable time or to lose his equity of redemption.
By section 85 of the Law of Property Act, 1925, a mortgage of an estate in fee-simple shall only be made by a demise for a term of years absolute, subject to a provision for cesser on redemption, or by a charge by deed expressed to be by way of legal mortgage. A first or only mortgagee shall take a term of 3,000 years from the date of the mortgage, and a second or subsequent mortgagee shall take a term commencing from the date of the mortgage one day longer. By section 86 a mortgage of a term of years absolute shall only be made either by a subdemise for a term of years absolute less by one day at least than the term vested in the mortgagor, or by a charge by deed expressed to be by way of legal mortgage.
The object of the changes in the new law is to secure to the estate owner a legal estate, and not a mere equity of redemption as hitherto. See Equity of Redemption ; Clog on Equity ; Northern Counties Fire Insurance Co. v. Whipp ; Salt v. Marquis of Northampton

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Definition of Mortgage is, temporally, from A Concise Law Dictionary (1927). This page needs to be proofread.

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