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Welsh Mortgage

A unique, now archaic species of common law mortgages where a person collects rents or profits in regards to specified real property, until the loan and any interest, is paid off.

Wharton defined a Welsh mortgage as:

"Now rare ... a conveyance of an estate redeemable at any time by the mortgagor on payment of the loan; the rent and profits of the estate being received in the meantime by the mortgagee in satisfaction of the interest.

"There is no covenant for the repayment of the loan and the mortgagee cannot compel either the redemption or foreclosure."

The title of the real estate is not forfeited and the capital of the loan, distinguished from the interest, is not reduced by the receipt of fruits or profits of the subject estate.

REFERENCES:

  • Oppé, A., Wharton's Law Lexicon, 14th Ed. (London: Sweet & Maxwell, 1955), page 1162.

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Unless otherwise noted, this article was written by Lloyd Duhaime, Barrister, Solicitor, Attorney and Lawyer (and Notary Public!). It is not intended to be legal advice and you would be foolhardy to rely on it in respect to any specific situation you or an acquaintance may be facing. In addition, the law changes rapidly and sometimes with little notice so from time to time, an article may not be up to date. Therefore, this is merely legal information designed to educate the reader. If you have a real situation, this information will serve as a good springboard to get legal advice from a lawyer.

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