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Legal Terms – Foreclosure
A legal recourse accessible to a mortgagee when the mortgagor has defaulted on the repayment of a mortgage by the stipulated redemption date. The mortgagee has the right to initiate proceedings in the High Court to obtain an order establishing a deadline for debt repayment; failure of the mortgagor to comply by that date will result in foreclosure, leading to the loss of the mortgaged property. If, following the issuance of this order (a foreclosure order nisi), the mortgagor fails to remit payment on the specified date and location (often a chamber in the Royal Courts of Justice), the foreclosure becomes absolute, and the property then transfers to the mortgagee. The court possesses the power to permit the mortgagor to reopen the foreclosure and thereafter reclaim his property. The remedy is controversial; the mortgagee's power of sale may be more advantageous. Furthermore, if the mortgaged property is valued below the loan amount, the mortgagee is unable to pursue a claim for the remaining balance.
A legal recourse accessible to a mortgagee when the mortgagor has defaulted on the repayment of a mortgage by the stipulated redemption date. The mortgagee has the right to initiate proceedings in the High Court to obtain an order establishing a deadline for debt repayment; failure of the mortgagor to comply by that date will result in foreclosure, leading to the loss of the mortgaged property. If, following the issuance of this order (a foreclosure order nisi), the mortgagor fails to remit payment on the specified date and location (often a chamber in the Royal Courts of Justice), the foreclosure becomes absolute, and the property then transfers to the mortgagee. The court possesses the power to permit the mortgagor to reopen the foreclosure and thereafter reclaim his property. The remedy is controversial; the mortgagee's power of sale may be more advantageous. Furthermore, if the mortgaged property is valued below the loan amount, the mortgagee is unable to pursue a claim for the remaining balance.
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