Mortgagee in Possession Proceedings:

A mortgagee in possession is the lender who exercises a power of sale over the land that the purchaser has purchased, under mortgage, but has defaulted on mortgage payments. This power is exercised so that the mortgagee’s debts are paid. Precisely when these powers arise will depend on the terms of the individual mortgage agreement. Not every mortgage is the same and there may be material or nuanced differences in the manner in which particular mortgage documents are drafted. For this reason, it is imperative to seek legal advice from a mortgage solicitor immediately, if and when the possible issue of default may arise.

In the past, the mortgagee in possession only had to act in “good faith”, but since amendments to the law in 2011, there are various further obligations that have been imposed. The mortgagee in possession has to:

• Take reasonable care when selling the property;
• Ensure that it is sold for no less than the market value; or
• Ensure that the mortgagee has sold the property for the best possible price.

These and ancillary obligations are also imposed on agents and consultants. The new laws seek to remedy the situation where a mortgagee in possession sells land to have its debts repaid and does so without any consideration being placed on the welfare or financial interests of the mortgagor. This often resulted in situations where the mortgagee in possession sold land very cheaply, took any money from the sale that covered the outstanding loan, and left the former occupier with little to nothing left. Any breach of any of these duties will be actionable by the person who has suffered loss.

If you are involved in a mortgage dispute, there might be a number of pertinent legal issues that need to be contemplated before you decide what to do. Our Sydney mortgage lawyers have been assisting property owners for over a decade and we have the skills and expertise necessary to assist in such matters.

If you would wish to discuss the particulars of your cases in more detail, you can contact our firm to book a meeting with a mortgage solicitor by telephone on (02) 9233 4048 or send an email to info@navado.com . 

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.