Land - Mortgage & Adverse Possession (2)

1. Mr. and Mrs. Smith purchased their matrimonial home in 1992 and were registered as join owners. IN 1998 they mortgaged the house to Easywave Bank. Recently both of them lost their jobs and they have seriously defaulted on their mortgage repayments. The bank proposes to sell the house and the Smiths seek advice on a number of points: (i) they believe that land prices are going to rise sharply in the near future and they would like the bank to postpone sale; (ii) they want the bank to sell by auction and to spend money on advertising the sale and on repainting the house in order to get a better price; (iii) they want to know how the proceeds of sale will be divided, particularly as Mary, Mrs Smith’s mother, who lives with them, contributed half the purchase price.
Advise them.

Smiths’ requests
- Mortgagee does not need to consider mortgagor’s request of postponing sale
- Mortgagee has no obligation to sell by auction
- It is reasonable to request mortgagee to spend money on advertising the sale
- Mortgagee has no obligation to repaint the house to get a better price

Contribution of Mary
- Is it a gift, loan, or beneficial interest?