(1) A legal mortgage of land may only be created by a charge by deed and such a charge, unless the context requires otherwise, is referred to in this Part as a "mortgage"; and "mortgagor" and "mortgagee" shall be read accordingly.

(2) Subject to subsection (3), from the commencement of this Chapter -

(a) any instrument which would, but for the provisions of this section,convey a legal estate or interest in land by way of mortgage, or

(b) any other transaction which under any instrument would operate, but for the provisions of this section, as a mortgage by conveyance of a legal estate or interest in land,

does not create a legal mortgage.