Humber/Ontario Real Estate Course 4 Exam Practice

Mr. and Mrs. Brown received a letter from their mortgage company advising that their mortgage payments should now be made to another company. What is their best course of action?

1. Consult legal counsel as mortgages cannot be assigned without mortgagor consent.

2. Understand that the mortgage cannot be assigned due to implied covenants.

3. Accept the assignment as it's a legal right of the mortgagee.

4. Stop making mortgage payments as the mortgagee has breached the agreement.

5. Request a revised payment schedule from the new mortgage holder.

6. Reapply for a mortgage with a different lender.

The correct answer is: Accept the assignment as it's a legal right of the mortgagee.

Accepting the assignment as a legal right of the mortgagee is the best course of action in this scenario. When a mortgage is assigned to another company, the original lender typically retains the right to transfer their interests, and this is a common practice in the mortgage industry. The borrowers must continue making their payments to the new lender in compliance with the terms of their mortgage agreement. The legal framework around mortgages generally allows for assignments without requiring the consent of the mortgagor (the borrower), unless specified otherwise in the mortgage document. This means that if the mortgage company has transferred ownership of the mortgage, the Browns are obligated to honor the new payment arrangement established by the new mortgage holder. Understanding the nature of such assignments can help the Browns navigate this situation without assuming there has been any wrongdoing or breach of contract. The course of action that involves requesting a revised payment schedule or stopping payments may lead to complications or negative repercussions, suggesting a misunderstanding of the legal rights involved in mortgage assignments.