Mortgage Property

Mortgage Property

What does MORTGAGE mean?

In the word mortgage, the mort- is from the Latin word for death and -gage is from the sense of that word meaning a pledge to forfeit something of value if a debt is not repaid. So mortgage is literally a dead pledge. It was dead for two reasons, the property was forfeit or "dead" to the borrower if the loan were not repaid and the pledge itself was dead if the loan was repaid. In the words of the 17th century English jurist (and apparently etymologist) Edward Coke:

A mortgage (Law French for "dead pledge") is a device used to create a lien on real estate by contract. It is used as a method by which individuals or businesses can buy residential or commercial property without paying the full value upfront. The borrower (also called the (mortgagor) uses a mortgage to pledge real property to the lender (also called the mortgagee) as security against the debt (also called hypothecation) for the rest of the value of the property....

Mortgage is a debt instrument by which the borrower (mortgagor) gives the lender (mortgagee) a lien on property as security for the repayment of a loan.

A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement, which may give rise to a pecuniary liability. Thus against the immovable property assigned as a mortgage, a debt or discharge of some obligation is secured.

Creation of Mortgage

Where the principle money secured is one hundred rupees or upwards, a mortgage otherwise than a mortgage by deposit by title deeds can be affected only by a registered instrument signed by the mortgagor and attested by at least two witnesses. When the principle money secured is less than one hundred rupees, mortgage may be affected either by a registered instrument signed by the mortgagor and attested as aforesaid, or (except in the case of a simple mortgage) by delivery of the property.

Different Types of Mortgages

There are 6 types of mortgages. They are Simple Mortgage, English Mortgage, Equitable Mortgage or Mortgage by deposit of title deeds, Usufructuary Mortgage, Mortgage by Conditional Sale, Anomalous Mortgage. The first three are common and the remaining three are not.

Simple Mortgage

Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee.

English Mortgage

Where the mortgagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that ...