Humber/Ontario Real Estate Course 3 Exam Practice

If a mortgagor wants to release any interest in the property to the mortgagee to avoid foreclosure, which remedy should be used?

1. Foreclosure

2. Mortgage Release

3. Power of Sale

4. Quit Claim Deed

5. Short Sale

6. Assignment of Mortgage

The correct answer is: Quit Claim Deed

A mortgagor can effectively release their interest in the property to the mortgagee to avoid foreclosure through a quit claim deed. This legal instrument allows the mortgagor to transfer any rights or claims they have in the property to another party without any warranties regarding the title. By doing this, the mortgagor is relinquishing their ownership interest, thereby potentially preventing the mortgagee from pursuing foreclosure proceedings. Utilizing a quit claim deed can simplify the process for both parties, as it often expedites the resolution of the debt without the prolonged and often costly process of foreclosure. In this scenario, it represents a proactive step taken by a mortgagor facing distress. In contrast, other options such as foreclosure, power of sale, and assignment of mortgage involve different legal processes that do not primarily focus on the direct relinquishment of the property interest by the mortgagor. A short sale typically requires the lender's approval and involves selling the property for less than the owed mortgage balance, which also does not entail a direct release by the mortgagor. A mortgage release refers to the act of satisfying the mortgage debt but does not address the transfer of property interest. Thus, the quit claim deed stands out as the most appropriate