Chapter 25 Self-test questions

. Oldham notes that mortgages play a key role in the availability of credit, but who/what is disadvantaged?

The lender.

The borrower.

The borrower's unsecured creditors.

The national economy.

. There are a number of forms of security interests which can be created over property in English law but not all these forms can be created over land. Please identify from the list below those forms of security interest that can be created over land.

Mortgage.

Charge.

Pledge.

Lien.

. S. 85(1) and 86(1) of the Law of Property Act 1925 provide that a mortgage of a legal estate can only be created at law by a mortgage by sub-demise or by a legal charge by way of mortgage. However, an owner of a legal estate can now only enter into legal mortgage by way of registered charge.

True

False

. The English mortgage has been described as a work of fiction. This is because:

It was first described in John Galsworthy's novel 'The Man of Property'.

The lender is the owner of the mortgaged property until the borrower repays the debt.

The lender is recognized as the legal owner of the mortgaged property and the borrower as the owner in equity.

The borrower remains the owner of the mortgaged property subject to the mortgage held by the lender.

. Mcfarlane advocates distinguishing between an equitable charge and a purely equitable charge. Please select all of the following reasons that explain why.

An equitable charge arises where the borrower is under a duty to grant the lender a charge.

A purely equitable charge arises where the borrower holds his or her property as security for a duty owed to the lender.

A purely equitable charge must satisfy the requirements of s2(1) of the Law of Property (Miscellaneous) Act 1989 whilst an equitable charge need only satisfy the provisions of s53(1)a of the Law of Property Act 1925.

An equitable charge may be created over property other than land.

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