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clients across Canada since 1987

Sep 06, 2021


In the previous Post LV I started a series unpacking mortgage statements, whether for information purposes, or for discharge or redemption purposes. This post will focus on mortgage statements for discharge purposes.

As the name suggests, mortgage statements for discharge purposes are requested when a homeowner/mortgagor intends to repay in full all amounts owing to her or is mortgagee. And to obtain and register a discharge of that mortgage.

Sometimes the homeowner/mortgagor is selling her or his property and intends on using the net sale proceeds to repay the mortgage. Other times, the homeowner/mortgagee is refinancing her or his property and will be placing a new charge on title; with the new mortgage loan proceeds to be used to repay the mortgage to be discharged.

In either case, the homeowner/mortgagor needs to know the amounts owing to her or his mortgagee in order to be certain that there are sufficient funds available to obtain the discharge in question.

Equally importantly, the purchaser or the new mortgagee, as the case may be, needs to be certain that the existing mortgage debt is fully repaid when the purchase transaction or the new mortgage loan transaction is completed. That is why the purchaser’s lawyer or the new mortgagee’s lawyer will most often (if not always) be the party who asks for the discharge statement from the existing mortgagee. That way, with a discharge statement addresses to the purchaser’s lawyer or addressed to the new mortgagee’s lawyer, the purchaser and the new mortgagee can each rely on the discharge statement.

This ‘reliance’ means that if the purchaser or the new mortgagee advances the funds to ensure that the existing mortgage debt is repaid exactly as required by the discharge statement, that that purchaser or that new mortgagee could (if need be) bring an action against the mortgagee in order to get a court order discharging the mortgage in question.

Next blog will continue to unpack mortgage statements for discharge purposes. As always, this blog is intended for information purposes only. It is not legal advice and cannot be relied on as such. Nor is it a substitute for hiring your own legal counsel, who will be an essential member of your mortgage default and power of sale team. And lastly, this blog is just my opinion. I reserve the right to change my mind. And I reserve the right to be wrong.

Be well and stay healthy.