If the mortgagor defaults on the loan, the mortgagee's interest in the mortgaged land consists of a right of foreclosure. This does not mean that the mortgagee automatically takes legal ownership of the land. Rather, foreclosure refers to a process whereby the mortgagee can apply to have the land sold and the proceeds of the sale used to repay the debt still owed. The mortgagor is then entitled to receive any extra money from the sale.
A discharge of the mortgage is also registered, to remove the charge from the title of the land. There are particular steps that a mortgagee must take when exercising their right of foreclosure. For instance, legislation sets out the required notice period. A mortgagee must also exercise reasonable care to obtain the best possible price when the property is sold.