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Philippine Mortgage
as security for the performance of an obligation, usually the payment of a
debt.
The term mortgage (from old French, lit. dead pledge[1][2]) refers to the
legal device used for this purpose, but it is also commonly used to refer
to the debt secured by the mortgage, the mortgage loan.
Philippine mortgage companies
In most jurisdictions mortgages are strongly associated with loans secured
on real estate rather than other property (such as ships) and in some
cases only land may be mortgaged. Arranging a mortgage is seen as the
standard method by which individuals and businesses can purchase
residential and commercial real estate without the need to pay the full
value immediately. See mortgage loan for residential mortgage lending, and
commercial mortgage for lending against commercial property.
In many countries it is normal for home purchases to be funded by a
mortgage. In countries where the demand for home ownership is highest,
strong domestic markets have developed, notably in Spain, the United
Kingdom, and the United States.
Contents [hide]
1 Participants and variant terminology
1.1 Creditor
1.2 Debtor
1.3 Other participants
2 Legal aspects
2.1 Mortgage by demise
2.2 Mortgage by legal charge
3 History
4 Foreclosure and non-recourse lending
5 Mortgages in the United States
5.1 Types of Mortgage Instruments
5.1.1 The mortgage
5.1.2 The deed of trust
5.2 Mortgage lien priority
6 See also
7 Notes and references
Philippines mortgage
[edit] Participants and variant terminology
Legal systems, while having some concepts in common, employ different
terminology. However, in general, a mortgage of property involves the
following parties.
[edit] Creditor
The creditor has legal rights to the debt or other obligation secured by
the mortgage. That debt is often the obligation to repay the loan by the
creditor (or its predecessor lender) who provided the purchase money to
acquire the property mortgaged. Typically, creditors are banks, insurers
or other financial institutions who make loans available for the purpose
of real estate purchase.
A creditor is sometimes referred to as the beneficiary, mortgagee or
lender.
[edit] Debtor
The debtor is the person or entity who owes the obligation secured by the
mortgage, and may be multiple parties. Generally, the debtor must meet the
conditions of the underlying loan or other obligation and the conditions
of the mortgage. Otherwise, the debtor usually runs the risk of
foreclosure of the mortgage by the creditor to recover the debt. Typically
the debtors will be the individual home-owners, landlords or businesses
who are purchasing their property by way of a loan.
A debtor is sometimes referred to as the mortgagor, borrower, or obligor.
[edit] Other participants
Because of the complicated legal exchange, or conveyance, of the property,
one or both of the main participants are likely to require legal
representation. The terminology varies with legal jurisdiction; see
lawyer, solicitor and conveyancer.
Because of the complex nature of many markets the debtor may approach a
mortgage broker or financial adviser to help them source an appropriate
creditor, typically by finding the most competitive loan.
The debt is, in civil law jurisdictions, referred to as hypothecation,
which may make use of the services of a hypothecary to assist in the
hypothecation.
home mortgage Philippines
[edit] Legal aspects
There are essentially two types of legal mortgage.
[edit] Mortgage by demise
In a mortgage by demise, the creditor becomes the owner of the mortgaged
property until the loan is repaid in full (known as "redemption"). This
kind of mortgage takes the form of a conveyance of the property to the
creditor, with a condition that the property will be returned on
redemption.
This is an older form of legal mortgage and is less common than a mortgage
by legal charge. In the UK, this type of mortgage is no longer available,
by virtue of the Land Registration Act 2002.
[edit] Mortgage by legal charge
In a mortgage by legal charge or technically "a charge by deed expressed
to be by way of legal mortgage",[3] the debtor remains the legal owner of
the property, but the creditor gains sufficient rights over it to enable
them to enforce their security, such as a right to take possession of the
property or sell it.
To protect the lender, a mortgage by legal charge is usually recorded in a
public register. Since mortgage debt is often the largest debt owed by the
debtor, banks and other mortgage lenders run title searches of the real
property to make certain that there are no mortgages already registered on
the debtor's property which might have higher priority. Tax liens, in some
cases, will come ahead of mortgages. For this reason, if a borrower has
delinquent property taxes, the bank will often pay them to prevent the
lienholder from foreclosing and wiping out the mortgage.
This type of mortgage is common in the United States and, since the Law of
Property Act 1925,[3] it has been the usual form of mortgage in England
and Wales (it is now the only form - see above).
In Scotland, the mortgage by legal charge is also known as standard
security.
In Pakistan, the mortgage by legal charge is most common way used by Banks
to secure the financing. It is also known as Registered Mortgage. After
registeration of legal charge, Bank's Lien is recorded in land register
stating that the property is under mortgage and can not be sold without
obtaining NOC (No Objection Certificate) from the Bank.
Equitable Mortgage
In an Equitable Mortgage the lender is secured by taking possession of all
the original title documents of the property and by borrower's signing a
Memorandum of Deposit of Title Deed (MODTD). This document is an
undertaking by the borrower that he/she has deposited the title documents
with the bank with his own wish and will, in order to secure the financing
obtained from the bank.
See also: Security interests - types of security
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