Saturday, January 12, 2013

Essentials of a Mortgage

A valid mortgage must have the following :

1. Should be in writing.
2. Parties to the mortgage must be clearly named.
3. Description of the property in as much detail as required to identify it.
4. Amount of Mortgage must be clearly stated.
5. A mortgage must be duly executed by the mortgagor or his agent.
6. A mortgage must be delivered by the mortgagor to the mortgagee. Without delivery a mortgage cannot take effect as a transfer of title.
7. Recording and Priority : A mortgage should be recorded in the county clerk or land record's office. If a lending institution does not record a mortgage, it may have lesser rights to proceeds from the same of the asset in case of default. Mortgages that are filed at the same time are equal in priority. Later mortgages will have lesser priority.

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