Question

why are regular payments of principal and interest to a mortgagee or trustee important for unrecorded retirements of property (land)?

Answer 1

Unrecorded retirements occur due to various circumstances such as normal scrapping of asset and theft. There may be also cases where retirments are unrecorded in case of property as well. Regular payments of principal and interest are important to mortgagee for the reasons being:

1. Regular receipts of principal and interest poses as a constant source of income.

2. Regular receipts of principal and interest provides for a fund to replace the asset.

3. Regular payments gives mortgagee the benefit of both earning money and time before mortgagee finally decides to legally transfer property to mortgagor or some other party without much legal obstructions.