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Facts[]

William and Tracy were a married couple. They took out a mortgage on their matrimonial home with Royal Bank. In the mortgage contract, the husband signed as a mortgagor, while the wife only signed as a third party "spouse". They defaulted on the mortgage for three months, and the bank is trying to foreclose on the house.

Issue[]

  1. Did the wife mortgage her interest in the home?

Decision[]

Judgement for the defendants.

Reasons[]

MacLellan finds that the wife did not mortgage her interest in the home. If the bank had intended for this then they would have had her sign the mortgage as a mortgagor. All that she did was forfeit her Matrimonial Property Act rights in his interest in the house; she did nothing with her own interests. Therefore, she and her husband were just joint tenants, and it is clear that one joint tenant can mortgage their interest in a house without the consent of the other tenant. Therefore, the bank can only foreclose on William's half of the interest, so when they resell it they must advertise it as a 50% interest in the house.

Ratio[]

  • In order to mortgage your interest in a home you must sign the mortgage as a mortgagor.
  • One spouse can consent to the other spouse mortgaging their half interest in the house – this forfeits the non-mortgaging spouse's rights to the other half of the interest, which now belongs to the bank; if this happens, the spouse and the bank become joint tenants, each owning 50% of the interest in the home.
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