Facts
- A mortgagor defaulted on his mortgage loan payments
- He was in negative equity – his security (property) was worth less than the amount owed, the extent to which disagreed upon
Issue
- Could the mortgagee’s possession be delayed to allow the mortgagor to make an application for sale under s 91(2) of the Law of Property Act 1925?
Decision
- No
Reasoning
- At common law, a mortgagee’s right to possession myst be strictly observed
- Section 36, which allows for postponement where it can be shown that a mortgage loan would be paid off within a reasonable period, does not apply where a mortgagor is in negative equity, so could not postpone possession to allow the mortgagor to make an application for sale
- This may not be case where a mortgagor could show that he has personal funds to meet any shortfall caused by negative equity
