174. Mortgage indemnity policy.

174.     Mortgage indemnity policy.

Mortgagees commonly take out a mortgage indemnity policy with an insurance company under which the mortgagee is entitled to a specified sum on the happening of events such as a failure by the mortgagor to make payments, a sale by the mortgagee, and the proceeds of sale being less than the outstanding debt1. The proceeds of the policy belong to the mortgagee and do not discharge any part of the debt owed by the mortgagor, even though the mortgagor is debited with the premium and the policy is described as additional security in