Where any property, vested in trustees by way of security, becomes, by virtue of the statutes of limitation, or of an order for foreclosure or otherwise, discharged from the right of redemption, it shall be held by them in trust—
to apply the income from the property in the same manner as interest paid on the mortgage debt would have been applicable; and
if the property is sold, to apply the net proceeds of sale, after payment of costs and expenses, in the same manner as repayment of the mortgage debt would have been applicable.
Subsection (1) of this section operates without prejudice to any rule of law relating to the apportionment of capital and income between tenant for life and remainderman.
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Where—
the mortgage money is capital money for the purposes of the Settled Land Act 1925;
land other than any forming the whole or part of the property mentioned in subsection (1) of this section is, or is deemed to be, subject to the settlement; and
the tenant for life or statutory owner requires the trustees to execute with respect to land forming the whole or part of that property a vesting deed such as would have been required in relation to the land if it had been acquired on a purchase with capital money,
the trustees shall execute such a vesting deed.
This section applies whether the right of redemption was discharged before or after the first day of January, nineteen hundred and twelve, but has effect without prejudice to any dealings or arrangements made before that date.