MORTGAGE AND ITS TYPES\n\nIntroduction:\n\n\u00d8 \nAs per section 58 of transfer of property\nact mortgage is the transfer of interest in a specific immovable property for\nthe purpose of securing an existing or future debt or for the performance of an\nengagement which may give rise to a pecuniary liability.in mortgage a property\nlike land, house or a building is used as a guarantee to get a money through a\nloan.\n\n\u00d8 \nA mortgage is the transfer of a right to\nimmovable property for the security purpose of a loan amount.\n\n\u00d8 \nA mortgage is used in an agreement between\ntwo parties i.e. a debtor one who takes a loan and the creditor who gives a\nloan.\n\n\u00d8 \nIf the debtor does not pay the loan amount\na creditor take right on the mortgaged property.\n\n\u00d8 \nA mortgage is a method which used to create\na charge on property by contract. \n\n\u00d8 \nThe person creating the mortgage is called\nthe mortgager and the person in whose favor mortgage is created (Bank) is\ncalled the mortgagee.\n\nmortgage\n\n\n\n\n\nTypes of mortgage\n\n\n\nRegistered mortgage:\n\n It is also called the\nlegal mortgage. In this a mortgage deed is written and stamped as per stamp act\nof the concerned state. The deed is then executed in the presence of two\nwitness. It is then registered with the registrar of assurances within 4 months\nof execution in terms of Indian registration act 1908.\n\n\n\n\n\nSimple Mortgage:\n\nIn a simple mortgage, mortgagor makes a promise to\nhimself to pay the mortgage money and agree that if he fails to pay a loan\namount, a mortgagee will have right to sell the mortgaged property through the\nintervention of the court and cover the loan amount. Neither the possession nor\nthe ownership of property is transferred to the mortgagee.\n\nRight of foreclosure cannot be exercised by the\nmortgagee.\n\n\n\n\nMortgage by conditional sale:\n\n\nIn\na mortgage by conditional sale, there is some condition included in contract at\nthe time of the agreement between the mortgagor and mortgagee. \n\nA\ncondition may be like if, in case of default of payment of loan amount after a\ncertain date, a sell become unavoidable or many more conditions.\n\nThe\nproperty continues to be in possession of the mortgagor.\n\n Mortgagee\ncan exercise the right of foreclosure.\n\n\n\nUsufructuary mortgage\n\nIn\na usufructuary mortgage, possession of the property is transferred to the\nmortgagee.The\nmortgagee is entitled to retain possession of the property and recover its dues\nfrom the income accruing from the property.Mortgagee\ndoes not have the right of foreclosure.Mortgagee\nhas no right to sue the mortgagor in his personal capacity or file a suit for\nsale of mortgaged property.\n\n\n\n\n\nEnglish mortgagee:\n\n\n\nIn\nEnglish mortgagee, a mortgagor makes a promise to pay the mortgage amount on a\ncertain date and transfer ownership to the debtor with a provision that he has\nto re transfer the ownership once the payment is done by the mortgagor.\n\n\n\nAnomalous Mortgage\n\nThe\nanomalous mortgage is the which is not a simple mortgage, a mortgage by\nconditional sale, a usufructuary mortgage, an English mortgage or a mortgage by\ndeposit of title deeds within the section 58 is called an anomalous mortgage.\n\n\n\nEquitable mortgage\n\n\n\n\u00d8 In\nan equitable mortgage, a mortgagor gives original title deed to the bank with\nan aim to create security there on.\n\n\u00d8 An\nequitable mortgage is created by depositing the original title deeds along with\ndocuments. In exceptional case an equitable mortgage can be created by\ncertified copy of the title deed provided there is proof that original is lost\nor irretrievably lost.\n\n\u00d8 In this,\na mortgage has no need to be registered with sub-registrar. But in case of a\nlimited company charge in respect of equitable mortgage under section 125 of\nthe companies act, 1956 must be registered with registrar of companies.\n\n\u00d8 The\ntile deed may be deposited by mortgagor or his agent.\n\n\u00d8 Title\ndeed can be a sale deed, partition deed, lease deed, gift deed, and deed of\nassignment.\n\n\u00d8 Deposit\nof title deeds to be done at Mumbai Kolkata, Chennai or any other town notified\nby the state government.\n\n\u00d8 Bank\nshould not part with the title deed even for a short duration.\n\n\n\n\nBalloon Mortgages\n\n\n\u00d8 Balloon\nmortgages are just for short term and it has fixed rate mortgage.\n\n\u00d8 In\nballoon mortgage, a monthly payment is lower because of large payment at the\nend of a term.\n\n\u00d8 A\nballoon payment is for the honest and qualified borrowers who have good credit\nhistory.\n\n\n\n\nReverse mortgage\n\n\n\u00d8 A\nreverse mortgage as the name suggests it works on reveres stream. It is\nmortgage loan in which a lender pays monthly installments to the\nborrower. \n\n\u00d8 A\nreverse mortgage is helpful to the older people in their financial need.\n\n\n\nPriority of\nmortgage: The priority of mortgage is considered from the date of execution of\nmortgage deed (for registered mortgage) or from the date of creation of\nmortgage by deposit of title deeds.\n\n\n\nRight of\nredemption: Right of the mortgagor to get back his mortgaged property on\nrepayment of the loan, is called the right of redemption. Limitation period of\nredemption suit is 30 years.\n\n\n\nRight of\nforeclosure: It is the right of the mortgage to deny the mortgagor of the\nproperty to exercise his right of redemption that is debarring the mortgagor\nforever to get back the mortgaged property is called as the right of\nforeclosure. This right is available to the mortgagee in case of mortgage by\nconditional sale and can be exercised through a court of law. Such suit is\ncalled suit of foreclosure and has limitation period of 30 years.