Sec. 110. The Power Of Sale In Mortgages And Trust Deeds

The mortgage or trust deed usually contains a power of sale whereby the mortgagee or trustee can foreclose the mortgage except in some states where mortgages must be foreclosed in the courts.

If the law permits, the mortgage or trust deed contains a power of sale by virtue of which the mortgagee can foreclose the mortgage without going into court, by simply having a public sale, paying the debt out of the proceeds and rendering the surplus to the debtor.

In some states it is provided by the law that all mortgages of real estate must be foreclosed by a judicial proceeding and in such a case a power of sale would of course be nugatory. Consequently, in these states no power of sale is contained in the forms used.

Sec. 111. Attempted Waiver Of The Right Of Redemption

The right of redemption cannot be waived by the parties to the contract.

As soon as the court came to the assistance of the mortgagee to give him redemption after the law day, the attempt was made by lenders to secure back the advantage thus taken away. By express contract it may be provided that there should be no right of redemption, but the courts have held that if a transaction is a mortgage then the incidents of a mortgage will exist irrespective of the agreement of the parties. The phrase in this connection has often been used "once a mortgage, always a mortgage" and this means that once the court has decided the transaction is a mortgage it will treat it as such for all purposes and the parties cannot deprive the mortgage of its nature by the addition of a few words. Since borrowers will in their necessities, often consent to anything, the lender could get back the old harsh remedy of forfeiture for nonpayment if the courts did not take this attitude.

Sec. 112. Recording Laws Concerning Mortgages And Trust Deeds

Recording laws are in effect in all states by which the creditor can perfect his lien against all the world by making proper record of the mortgage or trust deed.

Between the parties the mortgage is good without record and it is also good as to third parties who have notice, but it is the desire of one who has notes secured by mortgage to know that his security is good against the whole world. This he may accomplish by recording the mortgage in the place where the real estate is situated. Every party thereafter who desires to deal in respect to that real estate or acquire any rights against it must take notice of what the record is, which as a matter of fact, he may secure by examining an abstract brought down to date. Thus if a mortgage is properly put on record, subsequent judgment creditors of the mortgagor take a secondary lien; the subsequent mortgagees of the same property likewise take a junior lien, and purchasers of the land take subject to the mortgage.

Sec. 113. Possession By Mortgagee

If a mortgagee takes possession, this gives notice to all the world of whatever rights he may have.

It is customary to always record a mortgage whether the mortgagor remains in possession, which he usually does, or whether the mortgagee goes into possession. But it is still the law, if the mortgagee does take possession, this possession is a notice to everybody that he has rights in the property and will protect him against subsequent purchasers and encumbrancers.