And therefore I take it to be an established rule, that a mortgagee can never provide at the time of making the loan for any event or condition on which the equity of redemption shall be discharged, and the conveyance absolute.
12.
Michael Knoll, in " The Ancient Roots of Modern Financial Innovation : The Early History of Regulatory Arbitrage ", describes the important role that put-call parity played in developing the equity of redemption, the defining characteristic of a modern mortgage, in Medieval England.
13.
The law has historically taken a dim view of provisions which might impede this right to have the assets reconveyed ( referred to as being a " clog " on the equity of redemption ); although the position has become more relaxed in recent years in relation to sophisticated financial transactions.
14.
Impaired, that is, until lawyers concocted the bill of foreclosure, whereby a mortgagee could request a decree that unless the mortgagor paid the debt by a date certain ( and after the law date set in the mortgage ), the mortgagor would thereafter be barred and foreclosed of all right, title and equity of redemption in and to the mortgaged premises.
15.
Of course, now that the pendulum is swinging in the opposite direction, we can expect courts to explain where the limits on the newly expanded equity of redemption lie . . . and it is probably not a coincidence that the cases that have eroded " Graf v . Hope Building Corp . " have been accompanied by the rise of arbitration as a means for enforcing mortgages.
16.
A proprietary interest provided by way of security entitles the holder to resort to the property only for the purpose of satisfying some liability due to him ( whether from the person providing the security or a third party ) and, whatever the form of the transaction, the owner of the property retains an equity of redemption to have the property restored to him when the liability has been discharged.
17.
.. . there is now no rule in equity which precludes a mortgagee, whether the mortgage be made upon the occasion of a loan or otherwise, from stipulating for any collateral advantage, provided such collateral advantage is not either ( 1 . ) unfair and unconscionable, or ( 2 . ) in the nature of a penalty clogging the equity of redemption, or ( 3 . ) inconsistent with or repugnant to the contractual and equitable right to redeem . }}
18.
For a chattel mortgage to be a legal mortgage, it must transfer legal title to the chattel ( or chattels ) to the secured party ( typically the lender ) and include an express or implied proviso that the legal title will be transferred back to the debtor upon repayment ( known as the equity of redemption ) . ( If the chattel mortgage does not meet the statutory requirements for a legal mortgage it may nevertheless be re-characterised as an equitable mortgage or fixed or floating charge .)
