Simultaneously, M, the low-cost
mortgagor, in the absence of an assumption option, is also seeking for ways to profit from his/her low-cost mortgage.
Thus, where the
mortgagor is not the registered owner of the property but is merely an attorney-in-fact of the same, it is incumbent upon the mortgagee to exercise greater care and a higher degree of prudence in dealing with such
mortgagor.
By these instructions, a mortgage over granted land could only be registered at the DLD if the DLD had verified that the amount of the mortgage was used for the construction of a building on the granted land and payment of the mortgage funds had been made in such a way that ensured the mortgage was used for its intended purpose; the
mortgagor had a building licence for commercial development; and the
mortgagor had obtained a no-objection letter from the Ruler of Dubai permitting the mortgage of the granted land.
Defeasance Clause: The clause in a mortgage that gives the
mortgagor the right to redeem property upon the payment to the mortgagee of the obligation due.
If doubt remains, indemnity can be required if needed to protect the
mortgagor. (40)
Section 15(3) says 'When a financial institution serves a final notice of demand, all powers of the
mortgagor in regard to recovery of rents and profits from the mortgaged property shall stand transferred to the financial institution until such notice is withdrawn and it shall be the duty of the
mortgagor to pay all rents and profits from the mortgaged property to the financial institution.'
The doctrine of mortgagee in good faith presupposes that the
mortgagor, who is not the rightful owner of the property, has already succeeded in obtaining a Torrens title over the property in his or her name and that, after obtaining the said title, he or she succeeds in mortgaging the property to another who relies on what appears on the said title.
"The duty of the mortgagee is to do what a reasonable person would do to achieve the highest price possible to protect the interests of the
mortgagor," Henry wrote.
14 of 2008 Concerning Mortgages in the Emirate of Dubai (the 'Dubai Rental Law'), which states: "The
mortgagor will guarantee the mortgaged property and keep it in good condition until the debt is repaid.
According to the circular from the central bank, 'Before sending the first notice to the
mortgagor under sub-section (2) of section 1S of the Ordinance, the financial institution, in order to get the outstanding mortgage money determined, shall forward the case to a chartered accountant firm.
If the rights of the
mortgagor are fixed by an appropriate mortgage document, the state registration authority receives information about this mortgage paper using an electronic system.