The mortgagee may have an injunction to prevent waste by a mortgagor in possession.
Where a mortgagor is in possession of the property we have seen that it is his duty not to commit waste and he may be prevented by an injunction.
The mortgagee could at common law eject the mortgagor and take possession, but in the United States the mortgagor's right to ejection depends upon the right of possession, and we have seen that the mortgagor has the right of possession until condition broken and in some states has it at all events except upon a contract to the contrary.
Where the mortgagee does eject the mortgagor he does it merely for the purpose of satisfying the debt and when the debt is gone the mortgagee has a right to the premises again. Ejectment in such cases is not common as the mortgagee resorts to foreclosure.
A mortgagee has a claim which is secured by mortgage. He need not resort to the mortgage for his remedy but may have a judgment in a common law court upon the debt and by virtue of his judgment can take out execution on the property of the debtor, but not the property included in the mortgage, for this would give him foreclosure in a manner not contemplated by law.
The ordinary remedy of a mortgagee is that of foreclosure.
At common law this meant the barring of the mortgagor's equity of redemption and under modern statutes means the sale of the property through judicial proceedings or at a non-judicial sale, in states where that is allowed, for the purpose of satisfying the debt and paying a mortgagor the surplus. Where a mortgagor fails to pay the debt when it is due and the mortgagee finds that he must pursue some remedy to obtain satisfaction the usual remedy is that of making use of his security and is done by means of foreclosure.
In the event that he does not thus secure satisfaction of his debt, the mortgagor still owes him the balance.
By statute a mortgagee may have in a foreclosure proceeding a "deficiency decree" to cover the deficiency, if any results, in the foreclosure sale.
At common law foreclosure was by judicial proceeding to bar the equity of redemption. Under the modern practice it is either by judicial proceeding to sell the property and pay the debt out of the proceeds or to sell at a non-judicial sale under a power of sale in the mortgage.
(1) Foreclosure at Common Law. Foreclosure in early days as we have already indicated meant the taking of the estate mortgaged through a judicial proceeding whereby the equity of redemption was cut off after giving the mortgagor a certain time within which to redeem. By this method the mortgagor was given a chance to get his estate back but upon failure to comply with the terms of the decree the mortgagee obtained the property as his own though it might have been of a value largely in excess of the debt.
(2) Under Power of Sale in Modern Practice. It is the practice in some states to put in a mortgage or trust • deed a power of sale whereby the mortgagee or trustee is given the authority to sell the property at public or private sale and pay the debt from the proceeds, rendering the surplus to the mortgagor after payment of costs and accrued interest. In almost every state the old common law remedy of strict foreclosure is abolished.
(3) Foreclosure Through Judicial Proceedings Under Modern Practice. Where there is no power of sale in the mortgage the foreclosure must be through judicial proceedings and in some states powers of sale are not legal and in that case it must be foreclosed in the courts. The courts of equity foreclose a mortgage these days by ordering a sale of the property by a master in chancery or other judicial officer at which the best amount obtainable is secured by auction, out of the proceeds of which the mortgagee is paid his debt and expenses and the surplus then turned over to the mortgagor. Strict foreclosure as it existed in early times whereby the estate itself was taken is not now permitted as a general rule and never permitted where the security is of more value than the debt. From this sale the mortgagor has a certain time to make a redemption and this we.consider in the section 124.