MORTGAGES - EXCHANGE FOR DEED WITH OPTION TO REPURCHASE OR SELL TO A THIRD PERSON AND TAKE THE EXCESS OF PURCHASE MONEY

There is no principle more firmly established in equity than the one that the right of redemption constitutes an integral part of every mortgage. Neither by a stipulation in the mortgage itself, nor by any separate contemporaneous agreement, nor by giving a deed intended as a mortgage is it possible for the mortgagor to waive his equitable right to redeem. The application of this principle makes ineffectual the delivery of a deed in escrow at the time the note and mortgage are given, on condition that if the mortgagor does not pay his debt promptly the deed shall be delivered to the mortgagee; otherwise this would be an easy method of avoiding the rule. The basis for the policy back of the rule is said to lie in the necessities of the borrower and in his tendency to be overconfident of his ability to meet his obligations promptly. Relying upon the protection of borrowers as a sound public policy, the courts have refused to permit the mortgagor to be stripped of his equitable right to redeem by any device whatever made contemporaneous with the mortgage