Foreclosure - Definition - Law Dictionary Home Dictionary Definition foreclosure

Definition :

Foreclosure. A mortgagee, or any person claiming an interest in the mortgage under him, can compel the mortgagor, after breach of the condition, to elect either to redeem the pledge or that his equity of redemption be extinguished by an order of the Court. The foreclosure of mortgages is one of the matters assigned to the Chancery Division of the High Court. [Jud. Act, 1925, s. 56(1)]

A legal proceeding to terminate a mortgagor's interest in property, instituted by lender either to gain title or to force a sale in order to satisfy the unpaid debt secured by property, Black's Law Dictionary, 7th Edn.

Law of Property Act, 1925 (English) s. 91, replacing the Conveyancing Act, 1881 (44 & 45 Vict. c. 41), s. 25, replacing the (English) Chancery Procedure Act, 1852 (15 & 16 Vict. c. 86), s. 48, empowers either mortgagor or mortgagee to obtain an order for sale instead of redemption or foreclosure.

See ss. 88 and 89 of the (English) L.P. Act, 1925, in regard to the estate acquired by the mortgagee after foreclosure.

Indulgence is sometimes extended to the mortgagor in enabling him to pay, so as to prevent an absolute foreclosure. Some ground must be assigned for enlarging the time, and it is done only on the terms of paying the interest and costs already certified. Even after an order of foreclosure absolute the foreclosure may in a proper case be opened and the mortgagor allowed to redeem, Campbell v. Holyland, (1877) 7 Ch D 166.

For jurisdiction of the county courts in actions (up to 599l.) for foreclosure, see (English) County Courts Act, 1934 (24 & 25 Geo. 5, c 53), s. 52.

Where the amount lent exceeds 500l., to obtain a foreclosure an action must be brought in the Chancery Division of the High Court (Jud. Act, 1925, s. 56). Consult Coote or Fisher on Mortgages.