When a borrower grants a lender a mortgage on a property, what legal principle ensures the borrower retains the right to regain ownership by fully repaying the loan, despite attempts to permanently waive this right in the mortgage agreement?
The correct answer is the 'equity of redemption,' which guarantees that the borrower (mortgagor) has the legal right to reclaim their property by paying off the outstanding debt secured by the mortgage, even if the parties include clauses attempting to waive or permanently eliminate this right in their agreement. Such clauses, known as 'clogs on the equity of redemption,' are typically deemed unenforceable by courts to uphold fairness and prevent overly restrictive provisions on property ownership rights. The other answers are incorrect because they refer to concepts unrelated to mortgage rights or mischaracterize legal principles.
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What is the equity of redemption?
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What are 'clogs on the equity of redemption'?
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How does the acceleration clause differ from the equity of redemption?