Humber/Ontario Real Estate Course 2 Exam Practice

Which of the following is true about mortgagees?

1. A mortgagee lends the funds and a mortgagor makes the payments

2. The term charge no longer applies when referring to a mortgage

3. A second mortgage is sometimes called a senior or legal mortgage

4. A mortgagee has the right to assign a mortgage

5. A mortgagee cannot assign a mortgage

The correct answer is: A mortgagee has the right to assign a mortgage

The correct answer is D because a mortgagee, who is the party that lends the funds for a mortgage, does have the right to assign a mortgage to another party. This means that the mortgagee can transfer the rights and interest in the mortgage to a different entity or individual. This is a common practice in the real estate industry and can happen for various reasons such as when the original lender wants to sell the mortgage to another financial institution. Option A is incorrect because it describes the relationship between a mortgagee and a mortgagor, where the mortgagor is the borrower who makes the payments to the mortgagee. Option B is incorrect because the term charge is still used when referring to a mortgage, especially in legal and financial contexts. Option C is incorrect because a second mortgage is not commonly referred to as a senior or legal mortgage. A second mortgage is a subordinate (junior) lien on a property, while a senior mortgage takes priority over any junior mortgages or liens. Option E is incorrect because, as mentioned earlier, a mortgagee does have the right to assign a mortgage.