Ensuring Online Signature Lawfulness for Mortgage in United Kingdom

How to eSign a document: online signature lawfulness for Mortgage in United Kingdom

[Music] [Music] welcome to law sessions I am Jennifer Howen in this law session for land law we will be considering mortgages mortgages is one of the more easier topics to grasp as opposed to say leasehold covenants or Freehold covenants but nevertheless mortgages is not terribly difficult because most people will have some idea of what it is I'm talking about so uh without further Ado let's try and see how we will Wade through the topic itself well if we start off first of all with how do we get to this whole idea of mortgages well when you consider the cost of buying property today very few people not unless you're extremely wealthy perhaps very few people can afford to buy a house outright so most people will have to seek help by borrowing the money to purchase their home or land and this is commonly done by way of obtaining a loan or a mortgage from a bank or building a society which is then secured against the land in case the borrower becomes unable to repay the monies now before we start into the lecture itself I really need to go through some definitions so that you understand what it is that you must uh understand the the usage of the terms we will use as we go through now what is a mortgage a mortgage is a disposition of some interest in land or property as a security for the payment of a debt or the discharge of some of the obligation for which it is given the mortgage is the security and not the loan itself now this is interesting because a lot of times people say um that uh the bank has given them a mortgage well the bank has never given anyone a mortgage in its life except maybe the people who they've borrowed from for their building but the bank doesn't give you a mortgage what you will find is that you actually give the bank a mortgage what the bank gives you is the money so what a mortgage is is the security for the money the mortgage e therefore and as you know with law generally when you have e so for it's a person receiving the thing and or is the person giving so for example when you look at covenantor is the person giving under the Covenant the Covenant T is the person receiving so when you look at a mortgage the mortgage G is the person who receives the security which is of course the lender the Creditor the bank so that that's why the bank is called the mortgage e because he receives the mortgage which is he receives the security over the property the mortgage or is the person who gives the security so the mortgage or is actually the homeowner so the borrower or the debor is of course the mortgage or if you consider definition for charge when we talk talk about a charge over the property we're talking about confering rights in the land owe the property on a charge for the lender as security as before now some interesting terminologies here but again like I say it is not very difficult to assimilate uh Redemption and the Equitable right to redeem well these talk about the right of the mortgage or the homeowner to repay the loan and claim back the land or the property free from the encumbrance meaning of of course the loan free from the encumbrance exercisable after the date fixed for repayment as passed so the equity Equity of redemption is basically the totality of the Equitable rights of the mortgage or including the right to redeem it's the right to redeem its value and it's and basically pay off your debt so then what is a mortgage let's start looking at what this lecture is about well as I said the concept is not entirely too difficult to grasp the borrower borrows a sum of money from the lender and he agrees to pay these monies over a said period of time in addition of course to interest and he also then agrees to repay the amount outstanding and so the borrow agrees to a number of terms and condition conditions which of course are laid down by the lender because if I'm the bank and I'm lending you the money in order to buy your house then I want to make sure that certain things are in place and that certainly you have conditions which you have to um submit to now if the borrower cannot repay the money or he breaches any of the terms and conditions agreed with the lender the lender of course may sell the property in question in order to recover what what he's owed now in the case of SLE and wild an 1899 case a mortgage was defined by the courts as a conveyance of land as security for the payment of a debt or the discharge of some other obligation now there are two classifications of mortgages which can be created as with other interest in land law a mortgage can be legal it can be Equitable and we will certainly look look at these later on when we consider the creation of a mortgage now again I must remind you that regardless of what topic you are doing you have to consider what is the right you're considering is it an easement is it a lease is it a mortgage so the first thing is to consider the right the next thing is to consider is it legal or Equitable and of course the last thing is it registered or unregistered land and if it is how is it protected so be that in mind you can of course have a legal mortgage certainly of course can have an equitable mortgage now from a commercial point of view there are different types of mortgage that exist but that's from a commercial point of view I'm just flagging these up here for information purposes but certainly you will see how for example they come out in the cases um when you consider an acquisition mortgage this is where money is Advanced and used for the initial purchase of the property now the acquisition mortgage is is interesting when you look for example on a at a topic we've already considered which is in the context of co-ownership the acquisition mortgage is where you're buying the property for the first time and therefore you needed the monies in order to buy the property so even if you had a down payment you needed the monies in order to buy the proper property this has to be contrasted with a repayment mortgage but if you go back to co-ownership you will see for example in abinal and can where you have a co-owner in equity as it relates to an acquisition mortgage they are not able to have their interest override that of the mortgagees because the monies was used initially to purchase the property of course it's a different story when you're looking at uh a a situation where it is not an acquisition mortgage so an acquisition mortgage can either be a repayment mortgage or an endowment mortgage and repayment simply means that you pay back the interest with the principle and endowment simply means that you pay back an interest only now again uh if you go back to a previous lecture where I had raised the case of Tinsley Milligan um where I talked about the couple who had sought to defraud the DSs we see that maybe they wouldn't need to have defrauded the DSs had they gone probably for an endowment mortgage because again the DSs are quite happy to pay the interest on the portion but certainly not the repayment so besides an acquisition mortgage of course you have a non-acquisition mortgage mortgage and this is where for example a house is used as security for borrowing after the house has been acquired then principle either of the uh the types of mortgages I've mentioned can be used which is of course the repayment or the endowment now when you're looking at the creation of a legal mortgage of freeold or liso land before 1925 I want you to understand the historical aspect of it in order to be able to understand where we go from here especially under the lra historically and prior 1925 a conveyance of the fee simple to the mortgagee or an assignment of the residue of the terms of years to the mortgagee respectively subject to a covenant entered into by the mortgage e for the reconveyance or sorry or reassignment of the fee simple or residue of the term to the mortgage or as appropriate that's a bit of a mouthful what does that mean in practice so prior to 1925 how did you create a mortgage well a mortgage was created by the mortgage or which is the B borrower charging the property uh to the uh lender the property or the legal estate would be transferred to the lender so it would transferred in its entirety you will see how that differs nowadays but what used to happen was I go to the lender I want to borrow some money in order to buy that property the lender was the one who was the legal owner of the property nowadays that's not the case the homeowner is the legal loan on the bank has no more than a charge so you would hand it over to the mortgage e as security for the loan therefore if the borrow defaulted on the debt as the lender was the legal owner of the property they could sell it or let the property rent it out in order to recoup the debt and their expenses if the Bor kept to the repay ments and the terms and conditions of the loan under the agreement between the parties then the legal estate would of course be reconveyed to the mortgage or when the repayments were made in full so the effect of course was that legal title was transferred to the mortgagee the mortgagee Could That Could therefore enter into possession and on non-payment of the debt the mortgagee retained ownership of the land and of course when you look at the equity of redemption Equity began to interfere as they saw that this was unfair because given that when you look at the situation you're looking at you're paying but the legal owner of course is the bank so Equity looked at the unfairness of this and gave certain rights to the mortgage or known as the equity of redemption and these rights of course included any profit earned from the property during the mortgage by the mortgage was to be handed over to the mortgage or also the mortgage or was permitted by Equity to repay the debt at any time after the contractual date for repayment and pass now though or nowadays in order to retain the land after the date uh for repayment had passed the mortgage you had to apply to the chance court for a decree of foreclosure the court would consider the amount of the debt outstanding in relation to the value of the property and would either allow the mortgagee to retain the title to the land or would order that the property should be sold and the debt repaid to the mortgage out of the proceeds of sale that is pretty much what happened in that scenario prior to 1925 well what happened after 1925 well the system of mortgages was radically overall and is now governed by the law of property act 1925 section 85 to section 87 with the implication of the land registration act 2002 this is that the only form of mortgage or charge being capable of being registered against a registered legal estate by the land registry now there are two different ways that a legal lease can now be created I'm talking about a legal lease but really what I'm looking at here is the new way that a mortgage can be created now we see in the old way the um or prior to 1925 the lender owned the property legally now though we see that the borrower owns it and that the mortgagee has a charge we're going to break and when we come back we will start a fresh as to looking at the current position since [Music] 1925