Scribd
Upload
22 views3 pages

Real Estate Mortgage Rights and Obligations of Mortgagor and Mortgagee

A real estate mortgage is a contract where the property owner secures an obligation with their immovable property, allowing the creditor to enforce the obligation in case of default. The mortgagor retains ownership rights but must fulfill obligations such as delivering the property and making timely payments, while the mortgagee has rights including demanding payment and foreclosing on the property if necessary. Both parties have specific rights and obligations that govern their relationship under the mortgage agreement.

Uploaded by

VI Tomon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
22 views3 pages

Real Estate Mortgage Rights and Obligations of Mortgagor and Mortgagee

A real estate mortgage is a contract where the property owner secures an obligation with their immovable property, allowing the creditor to enforce the obligation in case of default. The mortgagor retains ownership rights but must fulfill obligations such as delivering the property and making timely payments, while the mortgagee has rights including demanding payment and foreclosing on the property if necessary. Both parties have specific rights and obligations that govern their relationship under the mortgage agreement.

Uploaded by

VI Tomon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

REAL ESTATE MORTGAGE

- is a contract embodied in a public instrument recorded in the Registry of Property, by


which the owner of an IMMOVABLE directly and immediately subjects it, whoever the
possessor may be, to the fulfillment of the obligation for whose security it was constituted.

- It is a contract in which the debtor guarantees to the creditor the fulfillment of a principal
obligation, subjecting for the faithful compliance therewith a real property in case of non-
fulfillment of said obligation at the time stipulated

Rights and Obligations of MORTGAGOR

• Mortgagor - owner of the property mortgaged/debtor

Rights

1. Right to retain ownership of the property mortgaged – in a contract of mortgage, the


mortgagor remains to be the owner of the property unless there is judicial or
extrajudicial foreclosure. It passes no title to the mortgagee and gives him no right or
claim to the possession of the property

2. Right to Redemption – the mortgagor reacquires the property which may have
passed under the mortgaged
➢ Kinds of Redemption
• Equity of Redemption – right of the mortgagor to redeem the property
after his default in the performance of the conditions of the mortgage but
before the sale of the property mortgaged or confirmation of sale. It
applies only to judicial foreclosure of real and chattel mortgage.
• Right of Redemption – right of the mortgagor to redeem the property
within a certain period after it was sold for the satisfaction of the debt;
applies only to extrajudicial foreclosure of mortgage.

3. Right to dispose the property mortgaged (Art. 2130) – the law considers void any
stipulation forbidding the owner from alienating or disposing the mortgaged property.
The mortgagor can still sell the property but the contract of mortgage remains attached
unless the debt is fully paid.
Obligations

1. To deliver the property mortgaged - to secure the fulfillment of the obligation,


the mortgagor which must be the owner shall deliver the property mortgaged
2. To pay the principal obligation – the debtor or mortgagor must pay principal,
interest, and other charges on time.

____________________________________________________________________________________

Rights and Obligations of MORTGAGEE

• Mortgagee – creditor

Rights

1. Right to demand payment to the transferee of a mortgaged property (Art. 2129) –


if the mortgagor has transferred the mortgaged property to a third person, the
creditor may demand payment to that third person only if the debtor failed to pay

2. Right to alienate or assign the mortgage credit to a third person (Art. 2128) – A
mortgage credit (the right of the mortgagee to claim payment using the mortgaged
property as security) is a real right, meaning it is attached to the property itself. The
mortgagee (creditor) can assign or sell this right to another party.

3. Right to Foreclosure – a remedy available to the mortgagee by which he subjects


the mortgaged property to the satisfaction of the obligation. It simply means if the
mortgagor fails to pay, the mortgagee can initiate foreclosure proceedings.
➢ Grounds for foreclosure:
• When the principal obligation is not paid when due
• When there is any violation of any condition, stipulation or warranty by the
mortgagor
➢ Kinds of Foreclosure:
• Judicial Foreclosure - There is judicial foreclosure made through the
filing of petition in court
• Extrajudicial Foreclosure - This is made in compliance with the
provisions of Act No. 3135 in the following cases:
1. When there is a stipulation in the mortgage contract that the
mortgage may be foreclosed extra-judicially: or
2. Where such extra-judicial foreclosure is made under a special
power of attorney inserted in the contract..

Obligations

1. To Release the Mortgage Upon Full Payment – The mortgagee must cancel the
mortgage upon complete payment of the debt.
2. To Follow Due Process in Foreclosure – The mortgagee must comply with legal
foreclosure procedures.

You might also like