The Important Distinction between a Mortgage and a Judgment Mortgage

Invariably in the course of our work, a question will arise as to the distinction between a Mortgage and a Judgment Mortgage.  Most of us in the course of our lives will take out a Mortgage of some value in order to purchase a residence.  This will involve the consent of the Mortgagee (Bank customer) granting a charge over a property in favour of the Mortgager (Bank).  As discussed in previous articles on this page, a Mortgagee will always be advised by their Bank to attend with their Solicitor when completing Mortgage documentation.  The important thing to bear in mind is that the Mortgage Agreement will be entered in to for a period of time and once the monies charged by virtue of the Mortgage Agreement have been redeemed in full, the Mortgage can be cancelled in respect of any legal documentation confirming ownership of the particular property.
On the other hand, a Judgment Mortgage is at the opposite end of the scale in terms of the effect which it has on the property as owned by any one individual or indeed corporation.  One of the options when a Judgment is obtained against either an individual or a corporation is to proceed to carry out property searches against same. If a property can be located in the name of the individual or corporation against whom a Judgment has been obtained, it is possible to place what is referred to as a Judgment Mortgage on that property.  In simple terms, this comprises of a Burden being registered against that property and this particular Burden will highlight the fact that a Judgment has been obtained against the owner of the property and the value of that Judgment together with any costs which have been awarded.
In practice, what the Judgment Mortgage means is that it gives the option to the Judgment Mortgage holder to proceed to have the property sold on foot of what are referred to as Forced Sale Proceedings. This will involve an application to the High Court for what is referred to as a Well Charging Order and a subsequent sale of the property.  The process involved is by no means straight forward and carried out within a short period of time.  However, it is not uncommon in the times that we are living in that at least some Banks together with other financial institutions are carrying out Forced Sales of individual’s properties.
There will be other attendant problems with Forced Sale in view of the fact that if the property is to be sold by way of Public Auction locally, there may not be a huge amount of interest.  However, our experience is that a lot of these properties can subsequently be sold by way of Private Treaty with an individual who attended perhaps at the Public Auction.
Another unfortunate feature of these particular type of sales is that invariably the property may be sold below value.  However, there is a protection built in to the system in that the Court must certify the sale and a view will have to be taken as to whether a reasonable price has been obtained and every effort has been made to obtain a reasonable price.
From the above, it should be clear that there is this very important distinction between a Mortgage as we know it in every day parlance and a Judgment Mortgage which is entirely different option available to a Plaintiff who has obtained Judgment and who wants to consider options in terms of enforcing same.
-Martina Larkin