Question

Discuss five main provisions of a mortgage and the rationale for each

Answer 1

Mortgage: A type of a secured loan.
Provision: A condition in a contract, that requires an action with in a specific period of time, in case the deed is deviating from the contract. It is intended to protect the interests of both parties in a contract.

1. A borrower approving any mortgage loan have to sign the mortgage loan contract. It gives the lender, right to take action on seizing the collateral in the case of a foreclosure. But a mortgage contract release closure can be negotiated by the mortgagor to protect them against the seizing of the collateral.

2. A contract to mortgage comes with only personal obligation and have no interest in the collateral. In case the mortgagee who paid the mortgage money brings a suit, the mortgagor have to repay the money with no option left.

3. An usufructuary mortgage is the case where the possession of the collateral is given to the mortgagee. The Mortgagee can enjoy the collateral until the mortgage money is paid off. Mortgagee can receive benefits accruing from the collateral during the period.

4. A mortgagee has the right to sue for the mortgage money and obtain a personal decree against the mortgagor, in case the mortgagor personally binds himself to repay the debt.

5. A multiple mortgages in the same collateral can not be ignored by both prior and subsequent mortgagee. In such cases the prior mortgage has to be redeemed up first.

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