Brief outline of mortgages and history
A mortgage is a statutory charge granted by the borrower in
favour of the lender over the borrower's real property. As real
property is a valuable, simple and stable asset, it is the most
preferred way for a lender to secure its debt until the loan has
been repaid in full.
Prior to 1863, the registration system for mortgages was the
"Old System" title, which required a borrower to give up
legal ownership of their land (real property) to a lender until
repayment of the loan. This meant that the borrower had to transfer
the land to the lender during the term of the loan and only held an
equitable interest in the land (equitable redemption). Once the
loan was repaid, the land would be transferred back to the
borrower, by way of an executed transfer or court
order.1 The main issue with Old System title was that it
was difficult to determine the ownership of the land without the
thorough examination of a chain of deeds to establish
