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Roy Simiyu, a successful businessman would like to obtain some funds for expansion of his business premises through a mortgage facility. Roy Simiyu would like to know...

      

Roy Simiyu, a successful businessman would like to obtain some funds for expansion
of his business premises through a mortgage facility.
Roy Simiyu would like to know what options would be available to the bank with
regard to the proposed security in the event of his business failing and his being unable
to repay the loan.

Describe the options available to the bank.

  

Answers


Maurice
(a) Statutory Power of Sale: this is the power of the mortgagee to sell the security if Roy failsto
repay the loan. The mortgagee must give the requisite notices to the mortgagor that is, Roy.

(b) Fore Closure: this is a foreclosing order which bars the mortgagor from redeeming
his security.

(c) Appointment of receiver: the bank is ordinarily empowered by the mortgage to appoint a receiver to take over the security given by the mortgagor to facilitate payment of the debt.

(d) Suit on personal covenant: This is the right of mortgagee to sue the mortgagor in the event
of default. It is an action for recovery of the amount due from the mortgagor.
maurice.mutuku answered the question on April 28, 2018 at 13:48


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