EXAMINATION OF THE MORTGAGEE?S POWER OF SALE

Abstract

The whole essence of Law of mortgage is to formulate rules that ensure the return of the borrowed sum with profit to the lender, while assisting the borrower to solve his pressing financial needs. If anything is borrowed, it should be paid back3 however, over the time it is discovered that human beings are by nature deceitful. „the wicked borrows but does not pay back…?4 coupled with the prevalence of unforeseen circumstances, which becloud the business environments, thus giving rise to every lender of money to make adequate provision for security before lending his money out. The mortgagee?s efforts are geared towards realizing a valuable security in the event of failure to repay the loan by the mortgagor. 5 These efforts ensure that to a large extent, the mortgagee (bank) has a recourse upon the mortgagor?s default in his contractual obligation on the date fixed for payment of the mortgage debt to exercise any of the available remedies, which are cumulative, and not necessarily in the alternative.6 The choice of a remedy usually depends on whether the mortgagee wants his capital or the interest. Where he wants his capital and seeks to put an end to the security, he commonly opts for either action for enforcement of covenant to repay, sale of the security or foreclosure. Whereas where he is concerned with the interest, he takes to possession of the property or appoints a receiver.7 Also, an order for specific performance and foreclosure are more suited to an equitable mortgagee while the others are applicable to a legal mortgagee.8