A mortgage is an accepted legal recourse wherein a person makes his personal (movable) or real (immovable) property as a security to a loan so that, if the person who obtained a loan (the mortgagee) fails to do his part, the person against whom the money is borrowed (the mortgagor) may take the collateral at his own disposal provided that the mortgagee’s right to redemption is satisfied.

A mortgage may be a chattel or real estate. A mortgage is a chattel if the collateral made as security is a movable property just like vehicles for instance. A mortgage is likewise real estate if the collateral that is made as a security to a loan is an immovable property; take lands for instance.

Mortgage is a recognized scheme and is identified by law as a mode of securing an obligation in cases where forbearance of money is involved. The mechanism of a mortgage is intended to protect the person who lends money from fraudulent borrowers. With this type, the mortgagor is protected from fraud because even if the person who borrowed money absconds, he is still protected by the collateral which ideally has a higher value than the money borrowed.

How should a mortgage be done?

To start a mortgage, the parties referred to as the mortgagor (the party who lends) and the mortgagee (the party who borrows) must execute a Deed of Mortgage signifying the party’s intention to enter into such agreement. The deed must be notarized and duly signed by the parties and the (disinterested) witnesses. After which, it shall be signed by a lawyer- notary public. Copies of the newly notarized deed shall, as a matter of procedure, be furnished to the parties, witnesses and the notary public notarial register filing. With this, the parties are bound to do their part of the bargain. Once the mortgage deed is good to go, it should be registered to the Registry of Mortgage so that an annotation/ encumbrance shall be placed at the back of the Torrens title in cases of real estate mortgage or at the back of the Certificate of Ownership of a vehicle for instance if it is a chattel.

The reason for this mandatory registration is to protect future buyers from buying encumbered properties. The encumbrance will only be lifted if the mortgagee has satisfied his obligation through payment. If this is the case, the mortgagor is bound and mandated by law to return the collateral to the mortgagee. Failure to return the collateral will open a case foe Estafa against the mortgagor.

Related Posts
Punishments And Penalties for DUI/DWI
No crime goes unpunished. No other crime in the US gets more offenders behind bars than Driving Under the Influence or Driving While Intoxicated offenses. Laws per state vary but ...
READ MORE
Investing in commercial property: know the pros and cons
A commercial property, just like any other real estate, is a good investment. Examples of commercial properties include office buildings, retail buildings, industrial buildings, warehouses, apartment buildings, and properties that ...
READ MORE
Landlord–tenant law
Landlord–tenant law is an aspect of the typical law that inform the privileges and responsibilities of residence owners and renters. It contains components of both actual estate law (specifically conveyances) ...
READ MORE
Why to hire dui lawyer
You must have heard of the friends or family members being caught under the DUI. Definitely, Driving under Influence is not a small case. In fact most of the states ...
READ MORE
Why should you buy investment property under your own name?
Because it is your investment, you can always choose where to name your investment property. If you so decide to put your property under your name, below are the advantages you ...
READ MORE
Risks and Benefits of buying a foreclosed property
Buying foreclosure property may give you great discounts; however, there are various underlying risks to it too. Benefits Pre-foreclosure home owners want to sell their houses in a hurry to avoid foreclosure, ...
READ MORE
declaring yourself bankrupt?
When you are neck deep in your debts and there are creditor’s threats looming and lurking around ready to take your assets and leave you with nothing, you may need ...
READ MORE
How lawyers can help real estate investors or buyers?
In many ways, a real estate lawyer can help real estate investors or buyers more than a real estate agent can. That's because they know all the complexities of real ...
READ MORE
Fighting for Red Light Camera Traffic Ticket
If you are facing a red light camera ticket case, the best thing you can use for your defense is to challenge the clarity of the image captured. You better ...
READ MORE
How to get workers compensation lawyer
For those of you who are in job need to have a clear idea about what you as an employee are liable for. And by this aspect it does not ...
READ MORE
Punishments And Penalties for DUI/DWI
Investing in commercial property: know the pros and
Landlord–tenant law
Why to hire dui lawyer
Why should you buy investment property under your
Risks and Benefits of buying a foreclosed property
declaring yourself bankrupt?
How lawyers can help real estate investors or
Fighting for red light camera traffic ticket
How to get workers compensation lawyer