When does a mortgage arise? What is a mortgage by force of law and by force of contract? Mortgage conditions by law

Content

Almost everyone dreams of having their own home, be it a small apartment or their own house. In modern economic realities, it can be problematic to save up even for a few square meters, not to mention the possibility of mortgaging existing housing. For this reason, citizens have to turn to banks for a loan. A mortgage by law is a loan for the construction or purchase of housing, in which the borrower, according to an agreement, pledges the property as collateral.

What is a mortgage by law?

The essence of the concept is that the buyer-borrower transfers real estate to the lender as security for the fulfillment of contractual obligations. If the buyer experiences force majeure and is unable to pay the debt, the borrower has every right to sell the pledged property to cover the debt. A legal mortgage is used if there is no need to draw up a separate agreement, but there are certain factors specified by law.

The difference between a mortgage by law and contract

There is another type of mortgage - by virtue of an agreement. At first glance, it may seem that the difference between them is small, but they have fundamental differences between themselves. A mortgage by force of law differs from a mortgage by force of contract in that in the first version it arises on the basis of legal grounds, and in the second - on the basis of a mutual agreement. By virtue of the law, a mortgage is registered automatically when registering a real estate purchase and sale transaction, but by virtue of an agreement - only upon mutual application of the mortgagee and the lender.

If we talk in simple words, then for a contractual mortgage any real estate debtor as security under a loan agreement. The emergence of a mortgage on the basis of the law occurs when the purchased housing is transferred to the lender as security, and it does not matter whether it is being built or purchased on the secondary market. Essentially, this is a targeted loan for the purchase of a home.

Legal basis

Since home lending is a complex system mutual settlements between the parties, then all procedures are regulated by legislative acts adopted in different time. In addition to Federal Law 102-FZ “On Mortgage (Pledge of Real Estate)”, there are a considerable number of acts that are the basis for the emergence of mortgage activity, but among the main ones it is worth highlighting the following:

• Housing Code of the Russian Federation;
• Federal Law “On state registration of rights to real estate and transactions with it”;
• Federal Law “On Credit Histories”;
• Resolution on subsidizing young families for the purchase of housing.

Cases where a pledge arises by force of law

When a legal mortgage arises, certain collateral and property obligations arise. There are a large number of situations when these circumstances may arise - this includes the acquisition of an apartment, a separate house, a plot of land and similar objects exclusively with the use of borrowed funds from the bank. The same applies to real estate construction if it is carried out with money allocated by a credit institution.

Mortgage of residential houses and apartments

The legal lien on real estate applies only to housing that belongs to individuals or legal entities. As for state and municipal housing, it cannot participate in the mortgage. It is important to understand that part of a residential apartment or house can also act as collateral, but only if it is an isolated room intended for living.

Selling on credit

As already noted, a mortgage is a loan that is issued to a citizen for the purchase of real estate, and here the purchased housing acts as direct collateral, which is separately stated in the contract. The creditor acquires the right to real estate while paying off the debt, although the mortgagor has the right to live there.

Rent

When concluding a rent agreement, a mortgage also arises by force of law, when the recipient of the rent transfers his home into ownership of another person who is the payer of the rent (all this is formalized by a notary). For understanding, we can give an example: a person transfers his apartment to a citizen who undertakes to care for him and provide him with everything necessary until his death. The ownership right passes after the conclusion of the annuity agreement, but the encumbrance is valid until the death of the annuitant, after which the encumbrance must be removed.

Pledge of property rights

An obvious example is the purchase of housing under construction on credit. In fact, the object has not yet been built, but the borrower, as a shareholder, has the right to it, since he has made a down payment. He borrows the rest of the money from credit organization, but to obtain a mortgage the bank requires collateral. However, since the object has not yet been registered, it cannot act as a guarantee. For this reason, a pledge of property rights is issued, and subsequently it is replaced with the constructed housing.

Registration of a legal mortgage

For registration, you can resort to the services of a mortgage broker, or you can do everything yourself. First, you need to contact a credit institution to clarify how much you can count on. Then you can start searching suitable option. Then you need to enter into a preliminary agreement with the seller and provide the necessary package of documents for consideration by the credit institution.

Having submitted all the papers, you will have to wait for a decision, since all the papers will be carefully checked. If the outcome of the situation is positive, it will be possible to sign a purchase and sale agreement, which must indicate that the property is being purchased partially with credit funds. After this, the mortgage and ownership of the home will be registered, and the seller will be able to receive his money.

Registration of a mortgage by force of law

Registration of a legal mortgage is carried out without charging a state fee. In addition, there is no need to write a joint statement. State registration assigns certain property rights to the borrower, which is necessarily recorded in Rosreestr. An important point is also that the registration of the contract occurs simultaneously with the registration of property rights. The date of registration is the day on which the entry was made into the register of rights to liquid real estate.

What property can be the subject of a mortgage?

If we look at the legislation, we can see that not every property can be the subject of a mortgage. It is prohibited, for example, to transfer property owned by the state as security. For housing where minors are the owners, a special approach is applied. Here is a list of what can be the subject of collateral:

• land;
• buildings, enterprises, objects under construction, apartments, houses, cottages, garages, etc.;
• land plots together with objects;
• lease rights (other rights) to use land plots, buildings and structures.

Limitations on encumbrance of rights

Since purchasing real estate has many pitfalls, lenders try to protect themselves in every possible way. For this purpose, mortgage restrictions by law apply, which arise immediately after registration. Encumbrance of the right is a guarantee that the borrower will pay the credit institution for the borrowed funds and return them within the time established by the mortgage agreement with a certain margin.

Underwriting – assessment of the borrower’s solvency

There is always a possibility that the borrower mortgage loan will not be able to repay the debt, and the reasons for this may be different. In order to avoid this, a high-quality check of the applicant’s solvency is necessary. To do this, underwriting is carried out, or in simple words, an assessment of a citizen’s ability to service the mortgage loan issued to him. In this way, the loan amount, the term of its provision, interest rate and other essential criteria.

It is calculated according to the relationship of financial indicators. The experience of American specialists is taken as a basis. The method is called the system of five “si” (from English letter“C”, with which all five components of underwriting begin):

• Character – reputation;
• Capacity – level of financial content;
• Capital – availability of equity capital (down payment);
• Collateral – income sufficiency;
• Conditions – economic conditions at the time of lending.

Calculation and analysis of mortgage loan servicing ratios

As practice shows, clients applying for a housing loan are subject to less stringent requirements, but this does not mean that their solvency is not checked. The table below shows the main indicators according to which the underwriting process is carried out:

In order for the lender to make a positive decision on issuing a loan, it is necessary that the above values ​​have the following figures:

Most credit institutions have their own indicators, so there are no exact values. Depending on the region, the average salary in the region and other circumstances, these coefficients may fluctuate.

Features of mortgage lending

Different states have their own characteristics of a mortgage loan. Depending on the legislative framework and established practice, our own model of housing lending is being formed. In Russia, for example, the distinctive features are the use of maternity capital or military mortgage. In addition, the current economic situation and mortgage risks also impose their own characteristics - the rates offered by domestic banks are almost 10 times higher than abroad.

American model using state budget funds

The American system began its formation more than a hundred years ago. Its main idea is that when purchasing real estate, and this is mainly purchase and sale on the secondary market, the missing amount is provided by mortgage bank. He then resells the debt to a mortgage agency, which issues securities, subsequently sold on the stock market. Payments for them are funds returned by the borrower.

European model of mortgage mechanism

In Europe, and many developing countries, the German model of housing lending is adopted as a basis. Its essence is that the client opens a bank account where he makes contributions until they reach a certain level. As a rule, this is about half the cost of the purchased housing. After this, the bank will provide him with a loan for the missing amount, taking the purchased property as collateral. Additionally, the state compensates the citizen about 10% of the cost of housing in the form of a subsidy.

Mortgage conditions by law

In various financial institutions, the conditions for providing housing loans are as follows: common features, as well as some differences. A mandatory condition for all lenders is insurance of the property, which does not contradict the law, confirmation of the borrower’s income and an independent assessment of the real estate. All other parameters may vary.

An initial fee

Depending on the amount the property was valued at, the bank provides the client with a loan. As a rule, the borrower is required to deposit a certain amount himself. This figure depends solely on the lender itself, but generally it is at least 10% of the cost of the home. Sometimes the bank finances 100% of the cost, but such programs exist by agreement with construction companies that are partners of the lender.

Interest rate

As already noted, the interest rate offered by Russian banks leaves much to be desired. It directly depends on the level of inflation in the country and the key rate of the Central Bank. Currently, its indicator is at the level of 10–12% per annum, although some lenders can find other figures. However, do not forget that the reduced rate may be associated with other fees associated with the consideration of documents or the issuance of a mortgage loan.

Payment amount calculation

To pay off debt, two types of payment calculations are used. With the differentiated method, the body of the loan is divided into equal parts, and interest is charged on the balance of the debt. This method of repayment is beneficial if the client takes targeted loan for a small amount and for a short period, since at the initial stage the loan payments are very high. The amount of the annuity payment is calculated using a certain formula. As a result, equal amounts are charged throughout the borrowing period.

Requirements for the borrower

If a citizen plans to take advantage of a housing loan, he must meet certain parameters. The bank immediately pays attention to the positive credit history, since the loan issued is large, and the lender is interested in repaying it. The work experience at the last place of work must be at least 6 months, and the client’s age must be 21–65 years. It’s worth mentioning right away that the given parameters have average values, because each bank has the right to present its own requirements.

Tax benefits for mortgage lending

For citizens who purchase real estate through lending, according to Russian legislation, it is provided tax deduction. In simple terms, this is a refund of part of the income tax paid. The amount has certain restrictions depending on the price of the purchased apartment (no more than 2 million rubles). Today the maximum possible refund amount is 260,000 rubles.

How to remove a mortgage legally

Believing that after paying the entire amount of the debt with interest to the creditor, the encumbrance will be removed automatically, the borrower is greatly mistaken. Once you have completed your payments, you must complete this procedure yourself. You need to contact the Unified State Register of Enterprises with a request to issue a new certificate of ownership, but for this you will need to provide a certain package of documents, which must include a document indicating full settlement with the creditor.

Video

The rules of the Civil Code of the Russian Federation (hereinafter - the Civil Code of the Russian Federation) on real rights are applied to the pledge of real estate (mortgage), and to the extent not regulated by these rules and the Federal Law of July 16, 1998 No. 102-FZ "On mortgage (mortgage of real estate)" ( hereinafter referred to as the Mortgage Law), general provisions on pledge (clause 4 of article 334 of the Civil Code of the Russian Federation).

The concept of a pledge agreement is given in Article 334 of the Civil Code of the Russian Federation, according to which “by virtue of a pledge, the creditor of the obligation secured by the pledge (pledgee) has the right, in the event of non-fulfillment or improper performance by the debtor of this obligation, to receive satisfaction from the value of the pledged property (the subject of the pledge) preferentially before other creditors of the person who owns the pledged property (the mortgagor).

By virtue of a pledge, in accordance with the norms of the Civil Code of the Russian Federation, the creditor has the right, in the event of non-fulfillment or improper performance by the debtor of the secured obligation, to receive satisfaction from the value of the pledged property (clause 1 of Article 334 of the Civil Code of the Russian Federation). A mortgage as a type of collateral provides satisfaction at the expense of the value of real estate exclusively.

According to paragraph 1 of Article 130 of the Civil Code of the Russian Federation, immovable things (real estate, real estate) include land plots, subsoil plots and everything that is firmly connected to the land, that is, objects whose movement without disproportionate damage to their purpose is impossible, including buildings, structures , objects of unfinished construction.

A mortgage agreement is an agreement on the pledge of real estate. The mortgage agreement contains provisions on the subject of the mortgage, the market valuation of the subject of the mortgage, the essence, size and deadline for fulfilling the obligation (material conditions) secured by the mortgage, and other conditions (Clause 1 of Article 9 of the Mortgage Law). The absence of essential conditions in a mortgage agreement makes such an agreement unconcluded (Article 432 of the Civil Code of the Russian Federation).

The mortgage agreement is drawn up in simple written form and does not require mandatory notarization (Clause 1, Article 10 of the Mortgage Law").

Any property can be pledged, including things and property rights. Exceptions are established by law (clause 1 of article 336, clause 1 of article 358.1 of the Civil Code of the Russian Federation).

The pledged property remains with the pledgor, unless otherwise provided by the Civil Code of the Russian Federation, another law or agreement (clause 1 of Article 338 of the Civil Code of the Russian Federation).

The mortgagor can be either the debtor himself or a third party (Clause 1, Article 335 of the Civil Code of the Russian Federation). To pledge a thing, it is necessary that the pledgor has the right of ownership to it. A person who has another property right may pledge a thing in cases provided for by the Civil Code of the Russian Federation (clause 2 of Article 335 of the Civil Code of the Russian Federation). The mortgagor of the right may be a person who is a creditor in the obligation from which the pledged right arises (right holder) (clause 1 of Article 358.1 of the Civil Code of the Russian Federation).

The pledgee of the pledge is a bank or other credit organization, or another legal entity that provided a loan or targeted loan for the purchase of real estate (land or residential premises).

The pledge agreement must be concluded in simple written form, unless a notarial form is established by law or agreement of the parties.

A pledge agreement to secure the fulfillment of obligations under an agreement, which must be notarized, is subject to notarization.

Failure to comply with the form of the pledge agreement entails its invalidity (clause 3 of Article 339 of the Civil Code of the Russian Federation).

In accordance with paragraph 3 of Article 339 of the Civil Code of the Russian Federation and paragraph 1 of Article 19 of the Law on Mortgage (as amended in force on the date of conclusion of the agreement), a mortgage is subject to state registration in the Unified State Register of Rights to Real Estate and Transactions with It (hereinafter referred to as the Unified State Register of Real Estate) in the manner , established by Federal Law No. 122-FZ of July 21, 1997 “On state registration of rights to real estate and transactions with it” (hereinafter referred to as the Registration Law).

As established by paragraph 1 of Article 11 of the Law on Mortgage (as amended in force on the day the agreement was concluded), state registration of an agreement giving rise to a mortgage by force of law is the basis for making a record in the Unified State Register of the occurrence of a mortgage by force of law.

In the case of a mortgage, by force of law, the mortgage as an encumbrance of property arises from the moment of state registration of ownership of this property, unless otherwise determined by the agreement (clause 2 of Article 11 of the Law on Mortgage).

The rights of the mortgagee (the right of pledge) to the property provided for by the Law on Mortgage and the mortgage agreement are considered to arise from the moment the mortgage is recorded in the Unified State Register, unless otherwise provided by law. If an obligation secured by a mortgage arose after a record of the mortgage was made in the Unified State Register, the rights of the mortgagee arise from the moment this obligation arises (clause 3 of Article 11 of the Mortgage Law).

Paragraph 2 of Article 20 of the Mortgage Law stipulates that a mortgage is subject to state registration by force of law.

State registration of a mortgage by force of law is carried out simultaneously with the state registration of the property rights of the person whose rights are encumbered by the mortgage, unless otherwise provided by federal law. The rights of the mortgagee under a mortgage may by force of law be certified by a mortgage.

In accordance with paragraph 1 of Article 2 of the Registration Law, state registration is the only evidence of the existence of a registered right.

An analysis of the stated rules of law allows us to conclude that any pledge of real estate, regardless of the basis for its occurrence, is subject to state registration, since state registration is the only evidence of the existence of a registered right.

There are two types of real estate mortgage: mortgage by contract and mortgage by law.

A mortgage by virtue of an agreement arises at the will of the parties, on the basis of a mortgage agreement concluded between them.

A mortgage occurs by force of law if:

– a residential house or apartment purchased in whole or in part with a loan from a bank or other credit organization is pledged from the moment of state registration of the mortgage in the Unified State Register (Clause 1 of Article 77 of the Mortgage Law);

– residential premises built in whole or in part using savings for housing provision for military personnel provided under a targeted housing loan agreement in accordance with Federal Law of August 20, 2004 No. 117-FZ “On the savings and mortgage system for housing provision for military personnel” is considered to be located pledged from the moment of state registration of ownership of a residential building (Clause 4, Article 77 of the Mortgage Law);

– a land plot acquired using credit funds from a bank or other credit organization, or funds from a targeted loan provided by another legal entity for the acquisition of this land plot, is considered to be pledged from the moment of state registration of the borrower’s ownership of this land plot. If the corresponding land plot is leased, then a mortgage arises by force of law for the right to lease, unless otherwise established by federal law or the lease agreement (Clause 1, Article 64.1 of the Mortgage Law);

– when constructing a building or structure on a land plot mortgaged under a mortgage agreement, the mortgage applies to these buildings and structures, unless otherwise provided by the mortgage agreement (Article 65 of the Mortgage Law);

– a land plot on which, using credit funds from a bank or other credit organization, or funds from a targeted loan provided by another legal entity, a building or structure has been acquired, constructed or is under construction, the right to lease such a land plot is considered to be pledged from the moment of state registration of ownership rights for a building or structure acquired, constructed or under construction, unless otherwise provided by federal law or agreement (Article 64.2 of the Mortgage Law);

– in the case of registration of ownership of a completed property that was previously registered and mortgaged as an object of unfinished construction, the mortgage remains in force, and its subject is the building (structure) erected as a result of the completion of construction (Article 76 of the Mortgage Law );

– when transferring a plot of land or other real estate for payment of rent, the recipient of the rent, as security for the obligation of the rent payer, acquires the right of pledge over this property (clause 1 of Article 587 of the Civil Code of the Russian Federation);

– a mortgage by force of law arises if a property is purchased on credit or in installments (Articles 488 and 489 of the Civil Code of the Russian Federation);

– a plot of land owned by the developer (right of lease or sublease), and being built (created) on this plot of land apartment house and (or) another piece of real estate to ensure the fulfillment of the obligations of the developer (mortgagor) under the agreement from the moment of state registration of the agreement are considered to be pledged to the participants in shared construction (mortgagors).

Today, the period for state registration of a mortgage of land plots, buildings, structures, and non-residential premises is 15 working days, and a mortgage of residential premises is 5 working days.

From July 1, 2014, a mortgage agreement or a loan agreement containing an obligation secured by a mortgage is not subject to state registration, however, the mortgage itself must be registered in the manner prescribed by law. For residential mortgages, an accelerated registration period is provided - five working days from the date of submission of the necessary documents. By virtue of the law, no state duty is paid for state registration of a mortgage.

If the property being mortgaged is jointly owned, the written consent of all owners is required. The consent of the other spouse must be notarized (clause 1, article 7 of the Mortgage Law, clause 3, article 35 of the Family Code of the Russian Federation).

When a residential house or apartment owned by minors, persons with limited legal capacity or incompetent persons over whom guardianship or trusteeship has been established is pledged, the transaction must be agreed upon with the guardianship and trusteeship authority (clause 5 of article 74 of the Mortgage Law, clause 2 Art. 37 of the Civil Code of the Russian Federation).

With the termination of the loan obligation, the pledge is terminated. The termination of the mortgage must be noted in the Unified State Register (Article 352 of the Civil Code of the Russian Federation, Article 25 of the Mortgage Law). By general rule To redeem the mortgage record, it is sufficient to submit to the registration authority:

– statement from the mortgage holder;

– or a joint application of the pledgor and the pledgee;

– or an application from the mortgagor with the simultaneous submission of a mortgage note containing a note from the mortgage owner regarding the fulfillment of the obligation secured by the mortgage in full. This mark must include words about the fulfillment of the obligation and the date of its fulfillment, and must also be certified by the signature of the owner of the mortgage and certified by his seal (if there is a seal) (Clause 2 of Article 25 of the Mortgage Law).

When the mortgage registration record is redeemed, the mortgage is canceled (Clause 3, Article 25 of the Mortgage Law).

The mortgage registration entry is repaid within three working days (Clause 1, Article 25 of the Mortgage Law).

There is no state duty paid for repaying the mortgage registration record.

Thus, a mortgage is traditionally understood as a pledge of real estate that remains in the possession of the debtor, but with the prohibition of the right to freely dispose of this property. The qualifying features of a mortgage are the subject of the pledge agreement, which can only be immovable thing, and the retention by the pledgor of the rights to own and use this thing.

Natalya Shcherbinina,

chief expert

Omsk department

Rosreestr Office

in the Omsk region,

state registrar.

Each of us has heard the word mortgage; it means a pledge of real estate, which acts as collateral under a credit agreement, loan agreement or other obligations. Its essence is that the collateral becomes the property of the lender if the borrower violates the terms of loan repayment and fails to fulfill his loan obligations. There are two concepts of mortgage by force of law and by force of contract. By the way, the relationship between the mortgagor and the mortgagee is regulated in our country by the Federal Law on Mortgage (Pledge). Therefore, let’s look at the differences between a mortgage by force of law and by force of contract.

What does mortgage mean?

First, let's answer the question of what a mortgage is in general. As mentioned earlier, this is a type of collateral. Or, in simple words, the surrender of real estate as security to a lender for a cash loan. This term refers to any type of real estate that is registered in the Unified State Register of Rights. These include:

• apartment;
• room;
• garage;
• land plot;
• industrial premises;
• commercial real estate.

In simple terms, this term means a pledge of real estate under cash loan. Despite the fact that the collateral is at the disposal of the borrower, he cannot fully own it or transfer it to another person. This restriction is valid until the end of the agreement between the lender and the borrower. In case of violation of the terms of the loan agreement, the borrower, of course, transfers the collateral to the lender to repay the loan debt.

What is a mortgage by law?

First, let's answer the question of what a mortgage means by force of law. Everything here is quite simple, in simple terms, when this type of security arises not on the basis of an agreement between countries, but on the basis of Russian legislation.

A targeted loan for the acquisition of property is secured by the acquired real estate, which in fact becomes the property of the borrower, which is recorded in the Unified State Register of Rights, and at the same time is encumbered by the lender, this is a mortgage by force of law. What it is? How it works in practice: you purchased an apartment using borrowed funds from the bank, in fact the owner Money you are not, therefore, when registering the transaction, you become the owner of the property, but at the same time it is pledged to the bank that issued the funds until the borrower fully fulfills its obligations.

Another feature of the relationship for this type of security is that registration of a mortgage by force of law occurs without additional agreement of the parties. In simple words, an encumbrance on the purchased object is imposed upon registration of the purchase and sale agreement in the Unified State Register of Rights, when the buyer and seller register the agreement. But the encumbrance is imposed immediately without the consent of the bank and the borrower.

There is no state fee for registration actions.

The last question is how to remove the mortgage by force of law, here you need to contact Rosreestr again with the mortgage document (this is a document that certifies the mortgagee’s right to the property). If this document does not exist, or more precisely, it was not drawn up, then both parties must be present at the procedure for removing the encumbrance, that is, the borrower and a representative of the financial institution.

What is a mortgage by contract?

Everything is simpler here; this form of collateral arises on the basis of a mutual agreement between the parties to the loan agreement. That is, when applying for a loan from a bank, the lender and the borrower determine the procedure for their relationship by an additional agreement. The peculiarity of this type of pledge, unlike the previous one, is that the terms of the agreement can be individual. Here are some examples:

• a property purchased using credit funds is registered directly in the name of the buyer, that is, the bank, in fact, does not impose an encumbrance on the property;
• the issued funds provide another property owned by the borrower;
  the borrower and the lender draw up a separate mortgage agreement, which is registered separately from the transfer;
• title, usually when the buyer receives a certificate of title.

Registration of a mortgage by virtue of an agreement is carried out on the basis of a separate mutual agreement. That is, if in the previous version the encumbrance was imposed immediately upon registration of the purchase and sale agreement, then in in this case this needs to be done separately. Usually, according to the agreement with the bank, the encumbrance is imposed after the registration of the purchase and sale agreement.

What is the difference

First of all, the difference between a mortgage by law and a contract is that in the first option it arises on a legal basis, and in the second option on the basis of a mutual agreement, that is, a contract. By force of law, a mortgage is registered automatically when registering a purchase and sale transaction in the second option only upon mutual application of the parties.

Another difference is that in order to register a mortgage, according to the law, an application can be submitted by one of the parties, both the mortgagee and the mortgagor. If we're talking about about the contract, the application must be submitted jointly. And the last difference is that, by virtue of the law, a state duty is not charged for a mortgage, but by force of agreement, yes.

Please note that with a mortgage, by virtue of the agreement, the bank bears certain risks, because it does not have a guarantee that the issued funds will be used for the intended purpose for the purchase of the property.

So, to summarize, a mortgage by virtue of a contract is, in fact, the relationship between a lender and a borrower that is governed by a mutual agreement between the parties, and not by the legislation of our country; this is what distinguishes a mortgage by virtue of a law. How to remove an encumbrance, the procedure will not differ significantly, that is, in both cases, Rosreestr must submit either a document confirming the termination of the relationship, or both parties to the agreement must be present.

If you want to take out a mortgage loan, a borrower may encounter two terms denoting the type of loan: “mortgage by force of law” and “mortgage by force of contract.” Both types involve real estate transactions, in both cases it is possible to purchase an object using collateral, but most often banks use a legal loan.

Mortgage by force of law: what is it?

This is the purchase of housing or other real estate in accordance with all legal norms. The law clearly regulates the process of processing and registering a housing loan.

Most banks issue mortgages by law, since they are less risky for the lender. If you are planning to take out a classic mortgage, that is, the transaction will be secured by collateral of the purchased property, it is more likely to assume that it will be a mortgage by force of law.

Important features of a legal mortgage:

1. Purchasing any type of real estate or building a house using borrowed funds.
2. An encumbrance is placed on the purchased object. The borrower receives ownership rights, but will be limited in his actions: the sale of the mortgaged property is impossible, and the bank may also set restrictions regarding the registration of other citizens in the apartment/house or the rental of the property.
3. If the borrower does not fulfill its obligations, the lender has the right to seize the pledged property.
4. By law, a mortgage is a strictly targeted loan. The borrower does not receive the funds in hand; they are transferred by the lender to the seller of the property.

In case of registration by force of law, not only the bank can become a creditor. It could be someone else financial institution or even a developer in the case of purchasing a new home. Developers often offer buyers installment plans without the participation of a bank. This is also a loan that is regulated by law and is issued accordingly. In this case, an encumbrance is also placed on the property, and the developer will act as the mortgagee: if the loan is not repaid, it is he who can initiate the process of foreclosure and eviction.

Mortgage by agreement

If the lender uses this type of transaction execution, it means that the relationship between the borrower and the lender will be regulated by a separate agreement, and not Federal Laws. In essence, a contractual mortgage involves the issuance of a loan on any terms; the parties to the transaction can indicate in the agreement any points that are not regulated by law, which are impossible in the case of a mortgage loan by virtue of the law.

Features of this type of mortgage:

1. The transaction is not necessarily secured. If you plan to take out a mortgage secured by the property you already own, in this case it will be a mortgage that will be issued by virtue of an agreement. When registering the transaction, you will immediately receive full ownership rights to the purchased property, which is impossible with a loan by force of law.
2. This is not necessarily a targeted loan. If you plan to get a cash loan secured by a real estate property you own, the agreement will also govern the transaction. Such transactions also apply to mortgage transactions.

Mortgage by force of law and by force of contract: differences

A negotiated mortgage is a transaction with more flexible conditions; the lender and the borrower can deviate from the framework of the law and draw up individual terms of cooperation. But this type of lending is rarely used, since it carries risks for the lender himself. In fact, in the market, a mortgage loan by virtue of an agreement is issued almost only when applying for a non-targeted loan secured by property or when applying for a mortgage secured by property that is already owned by the borrower.

What is the difference between a mortgage and a mortgage by force of law:

1. Under a mortgage, by force of law, a transaction is concluded only with the use of collateral of the acquired property.
2. Registration of a legal mortgage and settlement with the seller occur at the moment when the purchase and sale agreement is registered, that is, everything is done at the same time. In the case of a negotiated housing loan, the bank first issues money to the seller, after which the purchase and sale transaction is drawn up, and only after this is it possible to impose an encumbrance: precisely because the transaction is unprotected for some time, the banks take risks, and this may affect the rates.
3. Registration of a mortgage is free of charge by law. Upon contractual registration, payment of a fee will be required; for individual borrowers this is 1000 rubles. If the borrower is a legal entity, it will pay 4,000 rubles.

In both cases, anyone can act as a lender and borrower: citizens, organizations (not necessarily financial). A mortgage between individuals is not excluded by force of law.

Registration of legal mortgage

A mortgage by law and a mortgage by contract are similar in many ways. The borrower goes to the bank and collects Required documents and is waiting for a decision. Upon approval and completion of all formal procedures, for example, insurance, the transaction requires mandatory registration.

If you are taking out a standard housing loan by force of law, then to register it it is not necessary for all participants in the transaction to be present; an application from either the lender or the borrower is sufficient. But since the bank is interested in carrying out the procedure, it usually controls the process, and the transaction is fixed in the presence of a representative of the lender and the borrower himself.

Registration procedure:

1. The bank helps to collect a package of documents to transfer them to Rosreestr or MFC. There will be no problems at this stage: bank representatives know very well what papers are needed for registration.
2. After submitting the documents, the registration itself is completed within 5 working days. During this period, the government agency carefully checks all documents.
3. The borrower receives a certificate of ownership with a mark of encumbrance.

Registration of a loan by virtue of an agreement

Registration occurs strictly with the participation of all parties to the transaction: both the borrower and the lender’s representative. First, the purchase and sale agreement is registered, only after this can an encumbrance be imposed (with a mortgage, by force of law, the legalization of these documents occurs simultaneously). Then everything is standard: within 5 days after submitting the documents, the transaction is registered.

Restriction of rights and encumbrance of a property under mortgage by force of law

The emergence of a mortgage by force of law implies certain restrictions. The borrower buys a property, he can freely dispose of it, but he will not be able to sell the property. The fact of imposition of an encumbrance was recorded in the government agency. The only possibility of implementation is an agreement with the bank: usually this is only possible if problems arise with repaying the loan.

The lender may set limits on . One bank may completely prohibit such transactions, another will allow this, but only upon receipt of permission (the borrower applies to the bank with an application). As for registration, there are no restrictions for the buyer himself and his family members.

How to remove an encumbrance on a legal mortgage

After full payment home loan on schedule or ahead of schedule, the borrower contacts the lender and receives documents confirming the fulfillment of debt obligations in full. Both parties to the transaction participate in the removal of the encumbrance; they constitute a mutual agreement.

By law, the removal of the encumbrance can take place in the personal presence of the borrower and the lender: most often this is what happens, so the parties need to agree on the time of the transaction and make an appointment at the MFC. The period for document verification is up to 3 working days, when purchasing under DDU - up to 5 days. There is no state fee for this operation.

Welcome! Today we’ll talk about what a mortgage is by force of law. Many people associate the term mortgage exclusively with the procedure for obtaining a home loan, but it is a common misconception. A mortgage is a pledge of real estate, which will be encumbered under a loan agreement, installment plan or other obligations provided for by law. There are two concepts - mortgage by force of law and mortgage by force of contract , the features and differences of these types of transactions will be discussed below.

Any type of mortgage requires the presence of a property collateral (encumbrance). The most common type of mortgage is the purchase of real estate using bank funds. Banks most often practice issuing mortgages by force of law. From a legal point of view, such a transaction is more reliable, since the presence of an encumbrance is guaranteed; in this case, the borrower will not be able to challenge the ownership.

This type of obligation is formed when real estate is registered in the Unified State Register. A mortgage by force of law arises when ownership rights are transferred; this may be a contract of sale, rent, or other type of transaction.

As a rule, citizens search for housing options with an already approved loan decision in hand.

Having made the choice, a loan agreement is signed and a purchase and sale transaction is concluded. Following the completion of the transaction, the bank transfers funds to the seller of the property. In this case, although the borrower officially becomes the owner, the housing was purchased with borrowed funds, and it also acts as collateral.

The described case is the most striking example of how a mortgage arises by force of law. If the debt is not paid, the collateral property is transferred to the ownership of the creditor.

A mortgage, by force of law, arises not only when applying for a loan at a banking institution.

For example, if the purchase and sale agreement provides for the payment of funds to a private person in installments (installments), in this case the real estate is also under the seller’s encumbrance. During registration in the Unified State Register of the Russian Federation, a corresponding mark is placed in the encumbrance column.

Important! The presence of collateral sometimes needs to be documented; for this purpose, a mortgage is drawn up. It is concluded with a notary or a bank. Termination of the mortgage is provided only upon fulfillment of obligations under the agreement, namely repayment of the debt. Changing the mortgage holder is permissible. Such an operation may occur when refinancing a mortgage with another bank or selling a mortgage. You can read more about it and why it is needed on our website.

How is it different from a mortgage by contract?

In a mortgage by contract, the pledge arises in accordance with a mutual agreement or a separately drawn up mortgage agreement. When drawing up a loan agreement, the rights and obligations of the mortgagor and the mortgagee are negotiated individually.

Today in Russian Federation Few banks practice issuing mortgages by virtue of an agreement.

The law provides for all options for targeted lending, but there are conditions under which registration of ownership occurs when certain conditions are met. For example, when a site needs to be privatized. In this case, it is possible to draw up an agreement between the mortgagor and the mortgagee on the fulfillment of the conditions and transfer of ownership.

This type of targeted lending can be divided into several types:

• if no encumbrance is imposed and in fact there is no collateral;
• when the borrower already owns a property as collateral;
• when, after processing a loan, the borrower receives ownership rights, and only then provides this property to the bank as collateral.

Contract mortgages are not as popular because they are riskier for lenders and they do not have a guarantee of repayment. If we consider the example given above (the bank loan is approved, the client is looking for housing). After concluding a loan agreement, the borrower is provided with certain period to re-register the property in his name, then he must issue a mortgage on this housing. Accordingly, the property is not officially encumbered and the bank will not be able to prove the fact of issuing a mortgage loan; it will not be possible to sue for ownership.

The main differences between a contractual and legal mortgage:

1. Emergence. Here the main difference is seen in the name itself: one type of mortgage arises on the basis of law, the other - an agreement.
2. Registration. The mortgage, by force of law, is registered automatically when the new owner submits documents about the transaction to the Unified State Register. Documents can be submitted to the authority by both the mortgagee and the pledgor separately. The mortgage by virtue of the agreement is registered separately, and documents are submitted to the Unified State Register in the presence of the mortgagee and the mortgagor.
3. Type of collateral. With a mortgage, by force of law, a target loan is issued, which means that the purchased property automatically becomes collateral. A contractual mortgage does not require the presence of collateral, but the borrower’s existing property can also become an encumbrance.
4. Availability of state duty. There is no duty for a legal mortgage; for a contractual one, it is charged upon registration of the transaction.

A legal mortgage is also more profitable from a financial point of view; there is no fee for its registration and it does not require additional registration. On the other hand, the presence of an encumbrance has its drawbacks, since the collateral cannot be sold without the consent of the bank. In addition, in order to remove the encumbrance, you need to contact the bank and take documents about the successful repayment of the debt, and if the creditor has changed ownership over the years of its existence or was reorganized, then removing the encumbrance will be quite problematic.

Regulations

The main regulatory documents on this issue are:

• Federal Law “On state registration of rights to real estate and transactions with it” No. 122,

A legal mortgage arises:

1. When drawing up a rental agreement (transfer of real estate subject to the maintenance of a dependent).
2. A mortgage for the purchase or construction of real estate using borrowed funds.
3. The sale of goods (real estate) on credit, the presence of an encumbrance on the property is carried out in accordance with Article 448 of the Civil Code of the Russian Federation (Civil Code of the Russian Federation),

According to the norms of the law, the following types of property are defined that can be purchased with a mortgage: apartments in a new building or on the secondary market, houses (mansions), land plots, rooms (shared property), cooperatives, garages, industrial premises.

Important! The parties may come to a mutual agreement when the encumbrance is not imposed. In this case, the purchase and sale agreement must note that by agreement of the parties, in accordance with Article 488 of the Civil Code of the Russian Federation, no encumbrance is imposed. Thus, the borrower becomes the full owner of the property purchased on credit.

Registration of a mortgage by force of law

Now you need to understand the features of registration. Each property upon change of owner is registered in the Unified State Register. You can find out about the presence of an encumbrance yourself through Rosreestr, MFC or online on the Unified State Register website. The fastest and most convenient way to generate an extract from the Unified State Register of Real Estate is via the Internet; to do this, you only need to set the parameters about the existing real estate. The resulting statement will also show mortgage records.

Important! The preparation and collection of documents is carried out by the home seller or realtor. However, before executing the contract, the bank checks all documents for authenticity, so cases of fraud are excluded. If the property is already pledged, the loan will be denied.

The procedure for registering a mortgage by force of law:

1. The client applies for a loan from the bank and enters into a purchase and sale agreement.
2. To register in the Unified State Register of Real Estate, it is necessary to prepare all documents, including a purchase and sale agreement and a loan agreement. If a mortgage has been drawn up, then it must be provided; additional attachments (if any) and copies are also required. The owner of the mortgage has the right to demand that his information be entered into the Unified State Register of Real Estate as a mortgagee of the property. The registration entry is made within 1 month from the date of application.
3. Registration is carried out automatically; a corresponding mark is placed in the encumbrance column. The registration period is 5 working days.
4. For third parties, the emergence of a mortgage is considered from the moment of its registration.
5. The encumbrance is removed after repaying the debt from the bank.

If the borrower does not have the opportunity to personally submit documents to the Unified State Register, then he can use the help of a notary who certified the mortgage agreement between the mortgagee and the mortgagor. Notary services, of course, are paid.

It is impossible to determine which transaction scheme is more convenient. These two schemes are used in completely different loan programs. If a legal mortgage is given strictly for the purpose of purchasing real estate, then with a contractual one, you can use the funds received at your own discretion.

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