Humber/Ontario Real Estate Course 3 Exam Practice

If Mr. and Mrs. James receive a notification to redirect their mortgage payments to another company due to an assignment of mortgage, what is the correct course of action?

1. They must seek legal counsel as this assignment is likely illegal without their consent.

2. They should not object as mortgage assignments are legal and do not need their approval.

3. They can refuse and continue to make payments to the original mortgagee.

4. The assignment must be mutually agreed upon with the mortgagor and mortgagee.

5. They should contact the new mortgage company to renegotiate terms.

6. They have the right to stop payments if they do not approve of the new company.

The correct answer is: They can refuse and continue to make payments to the original mortgagee.

In the context of mortgage transfers, if Mr. and Mrs. James receive a notification regarding an assignment of their mortgage payments to another company, it is essential to understand the nature of mortgage assignments. Mortgage assignments generally allow lenders the ability to transfer their rights and responsibilities under the mortgage without requiring the borrower's approval. This means that the new mortgagee (the company to which the payments are being redirected) holds all the same rights as the original lender. The process is typically governed by the terms agreed upon in the mortgage contract, which usually includes a clause allowing for such transfers. Therefore, Mr. and Mrs. James do not have a legal basis to refuse this assignment, and they should continue to make their payments as directed by the new mortgagee to avoid defaulting on their loan. While they may have concerns regarding the new mortgagee, the legal framework allows for this type of assignment without the borrowers’ consent. Consequently, they are expected to make payments in accordance with the new arrangement, as stipulated by the notification they received.