2
MORTGAGE-ELEMENTS-KINDS/CLASSIFICATION
Sections 58 to 99 of the Transfer of Property Act deals with mortgage of property. A mortgage is a transfer of an interest in specific immovable property as security for the repayment of a debt.
Mortgagor, Mortgagee and Mortgage money
The person who transfers the interest in property is called the mortgagor. The person who receives it is named the mortgagee. A mortgage money is the amount for which the propery is transferred as a security.
Characteristics of Mortgage
Given below are the general characteristics or elements of a mortgage.
a.    Interest should be transferred
As the definition says, the interest of the property should be transferred to the mortgagee. In this way a legal right is created. So if there is no transfer of interest over the property, there cannot be a mortgage.
b.    Specific immovable propery
A mortgage is a transfer of interest in Specific immovable property. 'Specific' denotes 'clear'. The property must be capable of identification by a description which has to be provided in the mortgage deed. This helps in verifying the whole property and its value.
c.     Transfer for securing a debt
A mortgage is a security for repayment of a debt. It creates a legal right and obligation. Thus it differs from a personal undertaking where no interest is transferred. The purpose of mortgage is securing a debt and not discharging a debt.
Different types of Mortgages
Mortgages are generally divided into six. They are:
1. Simple Mortgage
2. Mortgage by Conditional Sale
3. Usufructuary Mortgage
4. English Mortgage
5. Mortgage by deposit of title deeds
6. Anomalous Mortgage
Each one is noted below:
1.    Simple Mortgage
In this type of mortgage there is personal obligation by the mortgagor to repay the mortgage money and he impliedly or expressly declares that obligation. He also agrees that in the event of his failing to pay the money, the mortgagee shall have the right to sell the mortgaged property to the satisfaction of the money given. In this mortgage the possession of the property is not given to the mortgagee. The mortgagor gives the mortgagee a power to sell the property through a suit in the Court.
2.    Mortgage by Conditional Sale
In this type of mortgage, the property is sold to the mortgagee by a condition that the sale shall become void if the debt is repaid and vice versa. If the mortgagor or the person who owes money repays it, the buyer shall re-transfer the property.
Here it is to be noted that the mortgagee is not the real owner, but an unreal or ostensible owner of the property. Therefore the mortgagee must get the sale absolute by an order of the court.
3.    Usufructuary Mortgage
The terms 'Usufruct'  denotes income from the property which includes rent. In this type of mortgage, the possession of the property is transferred to the mortgagee. He is also authorised to receive the rents and profits accruing from the property and appropriate it for the money given. He can retain the possession until the money is repaid.
4.    English Mortgage
In this Mortgage, the mortgagor agrees to pay the mortgage money on a certain date. Until this date, the mortgaged property is absolutely transferred to the mortgagee. The conveyance of property is with a condition that the mortgagee shal re-transfer the same upon the repayment of debt. Thus in this case the mortgagee gets possession of the property.
5.    Mortgage by Deposit of Title Deeds
According to Section 58(f) of the Transfer of Property Act,1882 of India where a person in any one of the towns of Calcutta, Madras and Bombay and in any other town in which the State Government concerned specifies in this behalf, delivers to a creditor or his agent, document or title to immovable property, with intent to create a security thereon, the transaction is called a Mortgage by Deposit of Title Deeds. This is commonly called Equitable Mortgage in English Law.
6.    Anomalous Mortgage
This is a combination of simple and usufructuary mortgage and also a combination of usufructuary mortgage and mortgage by conditional sale. A mortgage with possession of the property delivered to the mortgagee who has the power to appropriate rents and profits for a specified term of years and then return it to the mortgagor can be rightly called an anomalous mortgage.

Post a Comment

  1. Nice blog ! Thanks for providing some nice information source regarding the different aspects of mortgage loans.
    Mortgage knoxville

    ReplyDelete
  2. Hi,

    A type of interest only mortgage but where taking out a mortgage also involves taking out a complementary investment plan to be able to pay off the mortgage debt. This requires a separate investment plan to be able to pay off the mortgage capital at the end of the mortgage term. Thanks a lot...



    Mortgage Note Buyer

    ReplyDelete

Do not use abusive language

 
Top