Humber/Ontario Real Estate Course 2 Exam Practice

Mr. and Mrs. Jameson have met all covenants of a mortgage and fully paid all amounts owing. At the end of the term:

1. They must pay an interest penalty at the point of discharge.

2. The actual discharge cannot be obtained without the written consent of the mortgagee.

3. They have a legal right to a discharge of the mortgage.

4. The mortgagee is required to pay the applicable discharge fee.

5. No further action is needed for the mortgage release.

6. They must negotiate new terms for future lien removal.

The correct answer is: They have a legal right to a discharge of the mortgage.

In this scenario, the correct answer is C. Mr. and Mrs. Jameson have met all covenants of their mortgage and have fully paid all amounts owing. When all terms and conditions of the mortgage have been fulfilled, the mortgagor (borrower) has a legal right to a discharge of the mortgage. This means that they have the right to have the mortgage formally released or discharged without any further obligations. Options A, B, D, E, and F are incorrect: A. They must pay an interest penalty at the point of discharge - This is not applicable in this situation because all obligations have been met, so there should not be any penalty. B. The actual discharge cannot be obtained without the written consent of the mortgagee - In this case, as all terms have been satisfied, the mortgagor has the legal right to request a discharge without needing further consent. D. The mortgagee is required to pay the applicable discharge fee - Typically, it is the responsibility of the mortgagor, not the mortgagee, to pay any applicable discharge fees. E. No further action is needed for the mortgage release - While no further negotiations or actions are required from the mortgagor's side, they still need to formally request the discharge. F. They must negotiate new terms for future lien removal - Since all obligations have already been met, there is no need for the mortgagor to negotiate new terms for lien removal.