A party who pledges a property as security for a loan is the mortgagor, while the party who provides the loan is the mortgagee. If the mortgagor fails to repay the mortgagee the sum of money owed, the mortgagee may start mortgage actions against the mortgagor.
A mortgage action Originating Application (OA) is an application for one or more reliefs and is usually made by a mortgagee bank. Mortgage actions may contain claims for any of the following reliefs:
If you receive a mortgage action OA, it usually means:
You should read the documents carefully. Check that the amount of arrears (the instalments which you did not pay) and the total loan amount (including late payment interest) are correct.
You will also have to attend court for a hearing at the date and time stated in the OA.
Refer to the following to find out how you can respond to the OA, depending on your circumstances:
If you can repay your monthly instalments to the bank, you should approach the bank’s officers or lawyers to inform them how you intend to make payment as soon as you receive the OA filed by the bank.
If you cannot repay your monthly instalments to the bank, you should approach the bank’s officers or lawyers to inform them of your circumstances as soon as you receive the OA filed by the bank.
You may also propose an alternative repayment scheme, if possible. If the bank agrees with your proposal, the bank may either request for the hearing to be adjourned (postponed) to monitor your payments or ask the court for permission to withdraw the OA.
If the bank does not agree with your proposal, you should attend court for the hearing at the date and time stated in the OA.
If you have not heard from the bank by the date and time of the hearing, you should attend the hearing and inform the court accordingly.
The bank’s lawyers may inform the court whether the bank is agreeable to your proposal at the hearing.
If you wish to dispute the bank’s application for possession, you should attend court for the hearing at the date and time stated in the OA.
You should bring along all the documents which you wish to show the court during the hearing such as:
You must attend the hearing. If you are absent, the court may grant the order in favour of the bank and you may be required to surrender the mortgaged property to the bank and pay the outstanding sums due.
Depending on your case, you may do any of the following at the hearing:
After hearing your reasons and the bank's response to your requests, the court may:
If the court makes an order for possession, it means that the bank will be able to take possession of the mortgaged property.
In some cases, the court may order the bank to give you some time before it takes possession of the mortgaged property. If the court makes such an order, the bank cannot take possession of the property until after the date and time set by the court. This is to enable you to make arrangements to move out before the bank takes possession.
If the court did not order the bank to give you some time, you will be required to give possession of the mortgaged property to the bank immediately. The bank’s lawyers will usually write to inform you of the court’s order first before taking possession of the property.
You should approach the bank’s officers or lawyers to inform them of your situation. You may also try to negotiate alternative payment arrangements. The bank may agree to give you more time to pay.
If the bank does not agree with your proposal, you should attend the hearing in court and explain your situation.