The umbrella mortgage

When a borrower wishes to float a loan secured by a mortgage, the equity in the proposed realty to be used for security sometimes is not large enough to satisfy the lender.

If the borrower owned more than one parcel of realty, he could borrow against each parcel but this would normally require separate mortgage deeds.

So, sometimes the borrower will put up more than one parcel to secure the loan, and sign just one mortgage deed to cover all the parcels used for security.

The mortgage will be registered on title against each parcel so secured.

One mortgage. One payment. The umbrella mortgage, which shelters more than one parcel.

A clause would probably be in the mortgage deed covering the eventuality that the borrower may wish to sell one or more of the secured parcels of property. This clause would stipulate the principal reduction and possible penalty required if carried out.

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