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    Mortgage Bond: Mortgage Is A Security Furnished by A Person For The Repayment of A Loan

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    UsmanFaris
    A mortgage bond is a security provided by a borrower for repayment of a loan used to purchase real estate. The borrower (mortgagor) retains ownership but the lender (mortgagee) has the right to claim the property if repayment is defaulted. A mortgage must be registered and can only cover the specific land mortgaged. If repayment is defaulted, the mortgagee can initiate a court case to execute the mortgage through a judicial sale of the property, where the proceeds up to the loan amount go to the lender.

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    Mortgage Bond: Mortgage Is A Security Furnished by A Person For The Repayment of A Loan

    Uploaded by

    UsmanFaris
    56 views2 pages
    A mortgage bond is a security provided by a borrower for repayment of a loan used to purchase real estate. The borrower (mortgagor) retains ownership but the lender (mortgagee) has the right to claim the property if repayment is defaulted. A mortgage must be registered and can only cover the specific land mortgaged. If repayment is defaulted, the mortgagee can initiate a court case to execute the mortgage through a judicial sale of the property, where the proceeds up to the loan amount go to the lender.

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    Mortgage Bond

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    Mortgage Bond

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    A mortgage bond is a security provided by a borrower for repayment of a loan used to purchase real estate. The borrower (mortgagor) retains ownership but the lender (mortgagee) has the right to claim the property if repayment is defaulted. A mortgage must be registered and can only cover the specific land mortgaged. If repayment is defaulted, the mortgagee can initiate a court case to execute the mortgage through a judicial sale of the property, where the proceeds up to the loan amount go to the lender.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    56 views2 pages

    Mortgage Bond: Mortgage Is A Security Furnished by A Person For The Repayment of A Loan

    Uploaded by

    UsmanFaris
    A mortgage bond is a security provided by a borrower for repayment of a loan used to purchase real estate. The borrower (mortgagor) retains ownership but the lender (mortgagee) has the right to claim the property if repayment is defaulted. A mortgage must be registered and can only cover the specific land mortgaged. If repayment is defaulted, the mortgagee can initiate a court case to execute the mortgage through a judicial sale of the property, where the proceeds up to the loan amount go to the lender.

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    Mortgage Bond

     Mortgage is a security furnished by a person for the repayment of a loan.


     It is important to note that by a mortgage neither the ownership nor the possession of
    the property changes.
     A mortgagee is an entity that lends money to a borrower for the purpose of purchasing
    real estate. In a mortgage lending deal the lender serves as the mortgagee and the
    borrower is known as the mortgagor.
     Mortgage in immovable property and Pledge in movable property.
     The same property can be subject to more than one mortgage, where the first mortgage
    is known as the primary mortgage and second and further mortgages are known as
    secondary mortgages. In the secondary mortgage the first mortgage must be mentioned
    and in the process of recovery, the primary mortgage will get the priority.
     Where the repayment of a loan is being defaulted, the mortgagee has to file an action in
    the District Court and the procedure to such action is set out in the Mortgage Act No. 06
    of 1949 (as amended). The action which will be filed to execute the mortgage is known
    as Hypothecary action.
     A mortgage can only be created through writing and it has to be executed by before a
    notary public including two witnesses in terms of section 02 of Prevention of Fraud
    Ordinance.
     Once the Mortgage is created, it should be registered by respective land registry
    according to the Registration Ordinance.
     It should be noted that, the land to mortgaged must belong to the mortgager and he
    may be in full ownership or qualified ownership.
     The mortgage act has mentioned approved credit agencies to enter into mortgage bonds
    in addition to the individuals.
     In RDL only mode of realizing the mortgage was by obtaining a judgment of a court upon
    a mortgage debt and taking execution order (writ of execution) against the property
    mortgaged therefore it is known as judicial sale.
     In the case of HSBC versus krishna Pillai in some instances out of the court the execution
    could be done.
     Only the land subject to the mortgage can be sold in the judicial sale. Any other land
    owned by the defendant cannot be taken into consideration for the recovery of the loan.
     According to Section 48 the judicial sale has to be taken place within two months from
    the date of the decree. The direction of the sale will be made by Court in terms of
    Section 50 of the act.
     Accordingly the land will be sold by Fiscal of the Court to the highest bidder in a public
    auction. (Section 52)
     The plaintiff in a hypothecary action is not entitled to bid for or purchase anymortgaged
    land sold in execution of the decree unless leave to bid and purchase isgranted by the
    court. (Section 51)
     Where the property is being sold for a price higher than the amount stated in the
    decree, the balance proceeds can be claimed by the defendants, after establishing their
    claims and rights.
     Banking Act No. 30 of 1988. This is an act to provide for the introduction and operation
    of a procedure for the licensing of persons carrying on banking business and of carrying
    on the business of accepting deposits and investing such money; for the regulation and
    control of matters relating to such business; and to provide for matters connected
    therewith or incidental thereto.

     Debt Recovery No. 6 March 1990 an act to provide for the regulation or the procedure
    relating to debt recover by lending institutions and for matters connected therewith ok
    incidental thereto.
     Section 15 Debt Recovery Ordinance talks about Alienation of property by judgment
    debtor after Institution of action.

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