Humber/Ontario Real Estate Course 4 Exam Practice

Meziti wishes to replace his first mortgage without affecting the second one. Which option does he seek?

1. Postponement privilege.

2. Renewal privilege.

3. Deferral privilege.

4. Non-disruption privilege.

The correct answer is: Postponement privilege.

When Meziti wishes to replace his first mortgage while ensuring that the second mortgage remains unaffected, he is specifically looking for a legal mechanism that allows for the first mortgage to be replaced without disrupting the second mortgage's terms. The postponement privilege is the correct choice in this scenario because it allows the lender of the second mortgage to maintain their priority position in terms of security in relation to the property. This means that the second mortgage would not be impacted or altered by Meziti's action to refinance or replace the first mortgage. While other options such as renewal and deferral privileges relate to renewing the terms or delaying payments on existing debts, they do not specifically address the concern of preserving the existing second mortgage's standing while replacing the first. Non-disruption privilege could be a consideration in certain contexts, but it is more aligned with ensuring that a borrower can perform certain actions without affecting the lender's rights, rather than specifically addressing the replacement of a first mortgage while protecting a second. Thus, the postponement privilege accurately aligns with Meziti's objective.