Simple Definition of Legal Mortgage

Simple Definition of Legal Mortgage

Bez kategorii -

A mortgage is used to secure real estate by lien or conditional transfer of ownership, depending on the jurisdiction. A mortgage creates a security right in immovable property, which is created by a written deed (traditionally a deed) that transfers legal title (under the „theory of title of mortgages”) or pledges title by a non-possessory lien (under the „theory of hypothecary lien”) to a lender for performance under the terms of a mortgage deed. In just under half of the states, a mortgage creates a lien on the ownership of the mortgaged property. The seizure of this lien almost always requires legal proceedings in which the debt is declared due and in default and a sale of the property is ordered to pay the debt. [ref. Many mortgages contain a power of attorney clause, also known as a foreclosure clause, which is equivalent to a trust deed. Most „mortgages” in California are actually trust deeds. [24] The actual difference is that the procedure for attaching a trust deed can be much faster than for a mortgage, on the order of 3 months instead of one year. Since this foreclosure does not require legal action, transaction costs can be much lower. [ref. needed] This agreement, in which the lender was theoretically the absolute owner but in practice had few practical property rights, was considered clumsily artificial in many countries. The Act changed the common law position in that the mortgagee (borrower) would retain ownership but protect the rights of the mortgagee (lender), such as foreclosure, power of sale and right to take possession.

In the United States, states that have reformed the type of mortgages in this way are called lien states. A similar effect was achieved in England and Wales by the Law of Property Act 1925, which abolished mortgages by transferring a simple fee. In a death mortgage, the mortgagee (the lender) becomes the owner of the mortgaged property until the loan is repaid or another mortgage obligation is fully satisfied, a process called repayment. This type of mortgage takes the form of a transfer of the property to the creditor, provided that the property is returned upon repayment. According to the so-called „intermediate theory” of mortgages, a mortgage is considered to be the establishment of a lien on the mortgaged property until an event of default occurs in accordance with the loan agreement. After such a time, the same mortgage is interpreted according to the title theory. To do this, it includes in the loan agreement a provision allowing the borrower to retain ownership of the secured property, with the express agreement that the lender can enforce amicably if the borrower defaults on the loan. Mortgages can be legal or cheap. In addition, a mortgage can assume one of different legal structures, the availability of which depends on the jurisdiction in which the mortgage is granted. Common law jurisdictions have developed two main forms of mortgage: death mortgage and legal charge mortgage.

Fair mortgages are mortgages that must be respected, just like legal hypothecs. However, there is one crucial difference: a legal document can take precedence over a fair document. If you sign a poorly formulated mortgage in 2017 and then grant a second legal mortgage on your property in 2018, that second mortgage will actually become your first mortgage. However, your ability to do so depends on the laws of your community. A legal hypothec is the mortgage company`s lien on your property, which they hold in exchange for your monthly payments. Legal mortgages have filled all their gaps with correct information and are signed in the right places. They are also registered in accordance with the laws and regulations of the county in which the property is located. Legal hypothecs are binding documents that undoubtedly prevent you from making your loan payments or facing foreclosure. The theory of privilege is „the idea that a mortgage resembles a lien such that…” „, according to a mortgage, „. The mortgagee acquires only a lien in the property, and retains legal and equitable ownership, unless effective performance takes place.

Most U.S. states. have adopted this theory. [19] This theory is sometimes referred to as the „fair theory of mortgages.” [20] According to the theory of privilege. A hypothec is used to place a lien on the mortgaged property in favour of the mortgagee and the title remains with the mortgagee. Judicial enforcement is necessary in most cases as a remedy for mortgage default in the theory of privilege, and this process has proven to be cumbersome, time-consuming and costly. As a result, in the theory of privilege, lenders most often use non-mortgage instruments to secure loans, usually in the form of trust deeds or, in the State of Georgia, security deeds. Deeds are still used to transfer legal title to land, and the pervasive use of such deeds in lien theory has generally served to undermine the action of mortgages on it.

To protect the lender, a legal hypothec is usually registered in a public registry. Because mortgage debt is often the debtor`s largest debt, banks and other mortgage lenders conduct title searches to ensure that no mortgages are already registered on the debtor`s property, which may have a higher priority. Tax privileges will take precedence over mortgages in some cases. For this reason, if a borrower has delinquent property taxes, the bank will often pay them to prevent the lien holder from seizing and extinguishing the mortgage.