If a mortgaged property is totally destroyed or becomes defective, the mortgage is not extinguished. Instead, the Mortgage is transferred to any substitute property or insurance payout that replaces the original asset. The Mortgagee (the lender) mai…
If a mortgaged property is totally destroyed or becomes defective, the mortgage is not extinguished. Instead, the Mortgage is transferred to any substitute property or insurance payout that replaces the original asset. The Mortgagee (the lender) maintains their right to enforce the debt against this substitute asset according to the original rank of the mortgage. This protection ensures that the creditor's security remains intact even if the physical property is lost.
This is general information from the website library. Confirm current rules, fees and property details with the relevant authority before acting.
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