Under the Statute of Frauds, an oral contract for the transfer of a mortgage is enforceable. This may come as a surprise to some, as the Statute of Frauds requires certain types of contracts to be in writing in order to be enforceable. However, there are exceptions to this rule, and the transfer of a mortgage is one of them.
The Statute of Frauds is a law that exists in many countries, including the United States. It requires certain types of contracts to be in writing in order to be enforceable. These types of contracts include contracts for the sale of goods over a certain amount, contracts for the sale of real estate, and contracts that cannot be performed within one year.
However, there are exceptions to the Statute of Frauds. One of these exceptions is for the transfer of a mortgage. This means that an oral agreement to transfer a mortgage from one person to another is enforceable, even if it is not in writing.
This exception exists because of the nature of mortgages. A mortgage is a type of security interest that is granted by a borrower to a lender to secure a loan. The mortgage gives the lender the right to take possession of the property if the borrower fails to make payments on the loan. Because of the importance of the mortgage to the lender, it is typically in the lender`s best interest to ensure that the transfer of the mortgage is enforceable, even if it is not in writing.
It is important to note that while an oral agreement for the transfer of a mortgage is enforceable, it may be difficult to prove the terms of the agreement in court. This is why it is always recommended to have contracts in writing, even if they are not required by law.
In summary, under the Statute of Frauds, an oral contract for the transfer of a mortgage is enforceable. While this is an exception to the general rule that certain types of contracts must be in writing, it is important to remember that having a written contract is always the best practice.
