Practice Test GeeksCeMAP - Certificate in Mortgage Advice and Practice Practice Test
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Mortgage Law and Practice Flashcards

6 cards from real CEMAP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Mortgage Law and Practice flashcards as text

  1. What is the legal process a lender must follow before repossessing a residential property?

    Answer: The lender must obtain a court order for possession under the Administration of Justice Acts 1970 and 1973

    For residential properties, lenders must apply to the court for a possession order under the Administration of Justice Acts 1970 and 1973.

  2. What is the legal effect of a second charge mortgage on the borrower's property?

    Answer: It creates an additional security interest that ranks behind the first charge in priority

    A second charge ranks behind the first charge — if the property is sold, the first charge lender is paid first from the proceeds.

  3. How does the Unfair Contract Terms Act 1977 apply to mortgage agreements?

    Answer: It limits the extent to which lenders can exclude or restrict liability for negligence through contract terms

    UCTA 1977 restricts the ability of parties to exclude or limit liability, particularly for negligence, which can apply to terms in mortgage agreements.

  4. What is meant by 'undue influence' in the context of mortgage transactions?

    Answer: When one party to a mortgage transaction improperly influences another's decision to provide security, potentially making the charge voidable

    Undue influence occurs when one person improperly influences another's decision to enter a mortgage transaction, which can make the charge voidable — as established in Barclays Bank v O'Brien and Royal Bank of Scotland v Etridge.

  5. What are the lender's obligations under the FCA's MCOB rules when a borrower falls into arrears?

    Answer: The lender must make reasonable efforts to resolve the situation and treat the borrower fairly before considering repossession

    MCOB 13 requires lenders to treat borrowers in arrears fairly, explore alternatives, and only pursue repossession as a last resort.

  6. What is the legal position regarding gazundering in English property law?

    Answer: It is lawful because a verbal agreement to purchase property is not legally binding before exchange of contracts

    Gazundering — where a buyer reduces their offer just before exchange — is legal because no binding contract exists until contracts are exchanged.