Mortgage Loan

What is a mortgage loan?

A mortgage loan is the one secured by immovable property. It is issued by both natural persons and legal entities, including banks. A written mortgage contract is signed and registered in Public Registry.

Sequence is a significant consideration while registering a mortgage.

Demand of previous mortgager is preferential to demands of all further mortgagers.

What should you take into consideration while issuing a mortgage loan?

In order to issue a mortgage loan and conclude a relevant agreement you must pay attention whether the property with transitory rights for management has got another mortgager. What you have to do is:

• Apply Puclic Registry

• Demand extract from Public Registry about the legal state of the property

• Renew the Public Registry extract yourself and get insured against feasible difficulties

• If you are presented an extract from Public Registry by the property owner, pay attention to its issue date

• Examine the mortgage-bound property yourself and be sure whether it corresponds to the information provided by its owner.

What are the feasible problems in case the property with transitory rights for management has got several prior mortgagers?

If you issued a mortgage loan and concluded an agreement while the property that gained a transitory rights for management had 2 prior mortgagers, moreover, if a debtor evades paying the debt and the second-rate mortgager applies to Enforcement Bureau with the goal of ensuring the compulsory payment, you might lose your rights on the mortgaged property together with the chance to get paid.

Take the following into account:

In case the second-rate mortgager has applied to National Bureau of enforcement with the request to start enforcement administration and the latter realized the mortgaged property at compulsory auction:

• Demand of the second-rate mortgager will be met by the sum received from realization

• Property buyer will get the first-rate mortgager demand by transitory right

• Rights on mortgage of third and further mortgagers will be abolished.

What happens if a property has got several first-rate mortgagers?

There are cases when a property has got several first-rate mortgagers. If one of them presents an enforcement sheet to the National Bureau of Enforcement, the rest of first-rate mortgages won't be annulled and the property will gain further transitory rights. However, in case an enforcement sheet is presented by all the mortgagers, the auction sum will be distributed among them on equal terms.

Do you want to purchase mortgaged property?

Take the following into account:

In case you get interested in the purchase of mortgaged property, you will have to meet the demand of person(s) having right on mortgage; You will have to handle all the commitments of a debtor.