Reference no: EM133297898

Question

An elderly woman who could only read with difficulty operated a rooming house for students. Her home was large and in close proximity to the college. As such, it was a valuable piece of residential property. Her nephew, Herman, had on numerous occasions urged her to retire and suggested that she sell the property. For many years she refused to consider the idea. However, as a result of Herman's insistence, she eventually agreed that she would list the property with a local real estate agent to see what the market might be. A few days later, Herman appeared at her home with some papers that he said were the forms that he had obtained from the real estate agent for the listing of her property. In reality the forms were mortgage forms. Herman represented the forms as "only a formality, to let the real estate agent have authority to show the house to prospective buyers." His aunt signed the forms, believing them to be copies of the real estate listing agreement. Herman later registered the mortgage, which was company drawn for $50,000, and assigned it to a finance. for $45,000. He intended to use a part of the money to make the payments on the mortgage himself; he planned to use the balance for a trip to Las Vegas, where he expected to make a fortune by employing a new system for placing bets at the gambling tables in a casino. Herman's scheme failed, however, and he returned to Canada penniless. He soon spent the funds, which he had originally set aside to make a few payments on the mortgage, and again found himself without funds. The mortgage, as a result, went into default, and the finance company instituted foreclosure proceedings against the property. At that point his aunt suddenly became aware of the mortgage. Indicate the action that the aunt might take in this case. company. What Discuss the position of the finance might be the outcome of its foreclosure proceedings?