Mortgage by virtue of law definition. What is the difference between a mortgage by operation of law and a mortgage by virtue of a contract: how to remove the burden
Mortgage(from Latin hypotheca - pledge, from Greek hypoteke) - this is a type of pledge in which real estate, but at the same time remains the property of the debtor. If the debtor fails to fulfill its obligations, the creditor has the right to receive satisfaction through the sale of this property.
It is necessary to distinguish between the concepts of mortgage and, in which a loan is issued by a bank secured by real estate. Mortgage loan is one of the components mortgage system. Upon receipt of a loan for the purchase of real estate, the purchased property itself is mortgaged (pledge) to the bank as a guarantee of loan repayment.
Services for the selection, design and receipt mortgage loans called mortgage brokerage. Mortgage brokerage is carried out by a specialist trained for this activity - mortgage broker.
Mortgage is also a pledge of the already existing real estate of the owner in order to obtain a credit or loan, which will be used either for repair or construction, or for other needs at the discretion of the borrower-mortgagor.
In case of non-fulfillment of the main obligation, execution is levied only on the pledged real estate, and the pledgee has a priority right to satisfy his claims over other creditors of the debtor.
Grounds for the emergence of a mortgage and its regulation
The current legislation provides for two types of grounds for the emergence of a mortgage:
- by virtue of law;
- by virtue of the contract.
Mortgage by virtue of law
Mortgage by virtue of law (legal mortgage) is a mortgage that arises upon the occurrence of certain facts specified in the law, regardless of the will of the parties regarding the occurrence of a mortgage, upon transfer of ownership of a property from one person to another, more precisely upon the acquisition of this right by a new owner, but with the obligatory occurrence statutory facts.
A mortgage by operation of law arises in the following five main and common cases:
- Acquisition of houses, apartments, land plots using loan funds bank or other credit institution or purpose-built loans.
- Construction of residential buildings, buildings, structures or apartments using credit funds from a bank or other credit organization or funds from a targeted loan.
- Sale on credit.
- Rent.
- Pledge of property rights.
Mortgage by contract
Mortgage by contract (contractual mortgage) is a mortgage that arises on the basis of a mortgage agreement (mortgage of real estate).
A mortgage agreement is not an independent obligation, but consists in securing an obligation under a loan agreement, loan agreement or other obligation.
A mortgage by virtue of law differs from a mortgage arising on the basis of an agreement only in that the former arises by virtue of a direct indication in the law and is automatically registered together with another agreement even without an application by the parties, while a mortgage by virtue of an agreement is subject to registration upon a separate application by the parties. Since a mortgage by law arises with a targeted loan for the purchase of housing, when registering such a mortgage, the owner of the property changes, and to be more precise, such a mortgage arises simultaneously with the acquisition of real estate by the borrower.
Property that can be mortgaged
Property that can be subject to mortgage is defined in Article 5 of the Law on Mortgage - immovable things specified in Article 130 of the Civil Code of the Russian Federation, the rights to which are registered in the manner established for state registration of rights to real estate and transactions with it.
These things include:
- land plots, with the exception of land plots specified in Article 63 of the Mortgage Law;
- enterprises, as well as buildings, structures and other real estate used in entrepreneurial activities;
- residential buildings, apartments and parts of residential buildings and apartments, consisting of one or more isolated rooms;
- dachas, garden houses, garages and other consumer buildings;
- air and sea vessels, inland navigation vessels and space objects.
Assessment of the borrower's solvency
Assessment of the borrower's solvency (underwriting) is an assessment of the Client's ability to service the issued mortgage loan, that is, the calculation of the loan amount that the borrower will be able to repay, taking into account the characteristics of the borrower himself (type of employment, monthly income and the possibility of confirming it, the presence of co-borrowers or guarantors, family composition, the presence of minor dependents , etc.). The client goes through the underwriting procedure twice: when contacting a mortgage broker (it is carried out by an underwriter brokerage company) before concluding a contract for the provision of services, as well as at the bank (conducted by the bank's credit analysts) when considering an application for a mortgage loan.
Brief description of the underwriting procedure in the bank. Calculation of coefficients:
These ratios were developed by banks together with federal agency mortgage housing loans based on the experience of the USA and European countries. It is this set of indicators that reflects the complete picture of the borrower's solvency, and also allows you to standardize the procedure for approving and issuing a mortgage loan. In each banking program, these coefficients are approved in advance, but in some cases they can be adjusted, for example, according to the method of confirming income. K / Z, O / D and P / D may vary depending on the subject of the Russian Federation, the size of the average wages and preferences of a particular bank.
After performing the calculation according to these coefficients, it is usually chosen minimum amount, which will be the loan amount. Income and the way it is confirmed are one of the main factors that affect the loan amount. Most banks understand that not all income of future borrowers is reflected in the employer's accounting, so they develop various ways confirmation of income, for example: a certificate of income of a free form.
Features of a mortgage loan
The loan is issued for a long period (up to 50 years). The interest rate on a mortgage loan is lower than on other types of loans. The borrower of a mortgage loan must have the so-called "down payment" - a part of the cost of real estate acquired without taking into account the mortgage loan (although this condition is not necessary in some banks). Size down payment usually affects interest rate loan and varies from 0% to 70% of the value of mortgage real estate. The bank puts forward a number of special requirements for the borrower of a mortgage loan: confirmation of income, continuous work experience, etc. Mandatory participants mortgage lending are insurance and appraisal companies that provide the bank with the security of the transaction. Repayment of a mortgage loan is usually carried out in equal payments - annuities. The amount of such a permanent annuity payment (A) is calculated by the formula.
Issues related to the registration of mortgages by virtue of law and contract cause many problems and disputes. This is due to the rather blurred line between the terms used. Within the framework of this article, we will analyze what a mortgage by virtue of law means, what are the features, cases of application, and how mortgage by virtue of an agreement differs from that provided for by law.
Mortgage by virtue of law
The correct definition of the term mortgage by virtue of law, what it means and what rules it regulates, is possible only with the correct use of the following basic financial definitions:
- mortgage;
- mortgage(loan).
Many citizens misidentify these concepts and assume that in both cases we are talking on obtaining a loan for the purchase of housing, which is typical only for a mortgage loan.
A mortgage is one of the ways to ensure the fulfillment of obligations under an agreement, including a loan agreement, under which real estate is pledged. The owner of such property is actually deprived of the right to dispose of it without obtaining the consent of the pledgee, namely, to make transactions of sale, exchange, donation, and others.
Obligations by force of law are based on the operation of regulations that establish, regardless of the desire of the parties, the obligation to pledge real estate. The normative basis of such relations is:
Civil Code of the Russian Federation;
- Federal Law No. 218-FZ of July 13, 2015 “On State Registration of Real Estate”;
- Federal Law No. 102-FZ of July 16, 1998 “On Mortgage (Pledge of Real Estate)”;
- Federal Law No. 122-FZ of July 21, 1997 “On State Registration of Rights to Real Estate and Transactions Therewith” (expires in full from January 1, 2020).
From the meaning of these norms, it can be concluded that a mortgage by virtue of the law has the following characteristic features:
- a bank or other credit organization acts as a creditor and pledgee;
- real estate is acquired at the expense of borrowed funds;
- the conditions and requirements for collateral are contained in the loan agreement;
- In order to register, the mortgagor or mortgagee must apply for a mortgage by operation of law and provide a loan agreement on the basis of which, in State Register information about the parties is entered;
- registration of ownership of the acquired object and collateral encumbrance is carried out simultaneously.
The analysis carried out allows us to classify the types of mortgages by virtue of the law, depending on the grounds for the occurrence:
- use of credit funds when buying real estate at the construction stage - despite the absence of the property at the time of registration loan agreement it is supposed to be pledged;
- registration of a loan for the purchase of a finished property - registration of the rights of the pledgee is carried out at the time of transfer of rights to the property to the pledger;
- arising from the terms of the rent;
- other cases expressly provided for by the rules of law.
It should be noted that the parties are subject to a special preferential regime, which exempts them from paying state duty during registration.
Mortgage by contract
Although the law mentions the type of pledge of property arising from the terms of the contract, it does not clearly regulate it and does not contain the concept of what a mortgage under a contract is. From the meaning of the above norms, one should understand all types of pledge of real estate that do not have the features of a mortgage established at the legislative level.
The pledge arising from the agreement may arise in various situations, for example, when applying for a loan or be a guarantee for the fulfillment of other obligations. Regardless of the basis for the occurrence of pledge obligations, a separate independent mortgage agreement must be concluded containing information about the parties and the object of pledge.
Encumbrance registration is carried out in accordance with the following rules:
- a joint statement is required from the pledgor and the pledgee or a statement from a notary who certified the agreement;
- data in the USRN are entered in strict accordance with the completed transaction;
- registration is carried out separately and does not imply a change in ownership and other real rights to the object;
- making an entry in the state register is carried out after payment of the state duty - 1000 rubles (clause 28, part 1, article 333.33 of the Tax Code of the Russian Federation).
The transfer of property as a pledge is carried out on a voluntary basis, for example, to obtain greater amount consumer credit or a loan with a low interest rate.
Distinctive features
The correct classification of existing legal relations within the framework of collateral obligations, it will allow not only to register the encumbrance according to the rules, but also to determine whether the payment of state duty is necessary in a particular case.
For easy perception, the distinguishing features are presented in the table.
Registration of a mortgage by virtue of the law is relevant for all mortgage loans, including those issued under special government programs. The encumbrance of property under the rules of mortgage by virtue of an agreement is used by representatives of large and medium-sized businesses to open a credit line or obtain loans for the development of their activities, as well as individuals in mutual lending secured by real estate.
The grounds for the emergence of a mortgage - this phrase refers to factors as a result of which one of the following types of mortgage arises:
- Mortgage by virtue of law.
- Mortgage by virtue of the contract.
Mortgage by virtue of law
A mortgage by virtue of law (legitimate mortgage) arises as a result of the occurrence of circumstances specified in the federal law (Article 1, Clause 2 of the Federal Law of July 16, 1998 N 102-FZ “On Mortgage”) (hereinafter - Law N 102-FZ) . Such a mortgage arises exclusively with a targeted loan for the purchase of housing, and therefore its registration is necessarily accompanied by a change in the owner of the property.
In simple words: a mortgage by virtue of law is when an apartment purchased for credit funds is registered in the ownership of the buyer-borrower and when the same apartment becomes a pledge for the loan taken (which is a standard mortgage loan scheme).
Example: the borrower takes a target loan from the bank to buy an apartment, which becomes collateral on this loan.
Russian legislation provides for the following grounds for the emergence of a legal mortgage:
- Mortgage of houses and apartments. living quarters(residential houses and apartments) purchased or built using credit funds from a bank (or any other credit institution) is pledged to the lender from the moment of state registration of the mortgage (clause 1, article 77 of Law N 102-FZ). The same applies to the purchase of land (clause 1, article 64.1 of Law N 102-FZ), as well as the acquisition and construction non-residential premises(Article 69.1 of Law N 102-FZ).
- Sale on credit. Unless otherwise provided by the contract of sale, then the goods sold on credit from the moment it is transferred to the buyer and until payment is recognized as being pledged to the seller (clause 5, article 488 of the Civil Code of the Russian Federation). The same rules apply to the sale of goods on credit, with the condition of payment by installments (clause 3 of article 489 of the Civil Code of the Russian Federation).
- Annuity (life maintenance with a dependent). When transferring any immovable property against payment of rent, the recipient of the rent, as security for the payer's obligation, acquires the right to pledge this property (clause 1, article 587 of the Civil Code of the Russian Federation).
Registration of a mortgage by virtue of law
The state registration of a mortgage by virtue of law takes place simultaneously with the registration of the contract of sale. That is, in the certificate for the apartment you bought, in the “encumbrances” section, it will already be indicated that the housing was purchased using credit funds and cannot be sold without the consent of the lender (bank).
A legitimate mortgage is registered on the basis of an application by the pledgee (borrower) or pledgor (creditor), or a notary who certified the contract that led to the emergence of this type of mortgage (clause 2, article 20 of Law N 102-FZ). Read more about registering a mortgage.
Note! No fee is charged for state registration of a mortgage arising by virtue of law (clause 6, clause 3, article 333.35 of the Tax Code of the Russian Federation).
Mortgage by contract
A mortgage by virtue of an agreement (contractual mortgage) arises on the basis of a mortgage agreement (Article 1, Clause 2 of Law No. 102-FZ). In other words, the emergence of such a mortgage becomes possible only if there is a special agreement between the parties on the pledge.
In simple words: mortgage by contract - is when the buyer-borrower:
- Prepares an apartment purchased for credit funds into their own property (while receiving a “clean” certificate, i.e. without encumbrance).
- Collects a package of documents(usually up to 3 months are given for this) exactly for the apartment that is supposed to become the subject of collateral (i.e. in this case, both the loan apartment and any other real estate owned by borrower).
- Together with the lender (bank) draws up and registers a separate mortgage agreement(only after that an encumbrance is imposed on the property - i.e. from this moment the mortgage comes into force).
Example: the borrower takes a targeted loan to purchase real estate secured by existing housing.
By agreeing to a negotiated mortgage, the bank takes a big risk. Indeed, until the moment when the mortgage agreement is registered, the lender (bank) will formally have no rights to the property purchased under mortgage lending. Credit organizations find a way out of this situation in guarantors. For that period of time, until the living space is pledged, they require the borrower to provide several physical or legal entities ready to vouch for him. At the same time, for the same period of time, banks usually overstate the interest rate on the loan.
Registration of a mortgage by virtue of a contract
A mortgage by virtue of an agreement is not registered together with an apartment purchase and sale agreement, as is the case with a legal mortgage, but separately, on the basis of a separate mortgage agreement.
State registration of a mortgage by virtue of an agreement is carried out on the basis of a joint application of the pledgee and the pledgor. If the mortgage arose by virtue of a notarized mortgage agreement, then registration can be carried out on the basis of an application from a notary who certified this agreement (clause 1, article 20 of Law N 102-FZ). You can find out more about registering a mortgage.
Mortgage: by virtue of the law, by virtue of the contract - differences
So, how does a mortgage by virtue of law differ from a mortgage arising by virtue of an agreement:
mortgage in force |
occurrence | collateral can be | registration: 1 - when 2 - at the request of whom |
registration fee |
law | automatically without the consent of the parties | credited apartment | 1) simultaneously with the state registration of ownership 2) can be carried out on the basis of an application by one of the parties to the transaction (pledge holder, pledgor, notary) |
not charged |
agreements | when drawing up a separate contract | credited or any other apartment owned by the borrower | 1) after the registration of the sale and purchase agreement, on the basis of a separate mortgage agreement 2) is carried out strictly on the basis of a joint application of the pledgee and the pledgor |
charged |
Mortgage is a pledge of real estate, which is issued as security under a loan agreement, credit agreement, or for other reasons. The mortgage agreement gives the creditor the right, in case of non-payment of funds within the agreed time frame, to withdraw the pledged property or receive money equivalent to the value of the pledged property. The procedure for the implementation of procedures is determined federal law"On mortgage (mortgage of real estate)".
The following property may be pledged under a mortgage agreement:
- enterprises, buildings and structures that are used in business;
- residential apartments, houses or their isolated parts;
- land;
- garages, dachas, summer houses and other similar buildings;
- inland navigation vessels, space objects, sea and aircraft.
The mortgage assumes that the property pledged during the entire term of the contract remains in the possession and use of the pledgor. The latter can be either the debtor or a third party who is not a party to the obligation.
In Russia, there are two types of mortgages: by virtue of law and by virtue of an agreement. What is it, and what differences exist between them, we will consider further.
Mortgage by virtue of law
This type of pledge arises not as a result of a special agreement on pledge, but due to certain legislative facts. The second name of the concept is legal mortgage. It does not include payment state duty and a visit to the registration service of employees of a banking or other credit institution that provided a loan for the purchase of housing. Mortgage by virtue of law arises on the basis of registration (provided that credit funds are in circulation) of the following documents:
- agreements equity participation in construction;
- ownership;
- assignment agreements.
State registration of a mortgage by virtue of law takes place on the basis of the original agreement (loan, credit and others), which led to the emergence of this type of pledge. The property right of a person who is burdened with a mortgage is registered overnight, unless other circumstances are established by law.
Mortgage is activated when credit funds are used in full or in part for the acquisition / construction and further state registration of the following objects:
- Land area.
- Non-residential premises, buildings or structures with a land plot.
- Residential premises (houses, apartments).
- Goods (under the contract of sale).
Also, a mortgage, by virtue of the law, arises when transferring against the payment of rent land plot or other real estate. Thus, the main reason for the activation of legal mortgages is getting target loan and creation of conditions when it is necessary to acquire property and register it at the state level.
Let's take an illustrative example. Let's say you buy an apartment with a loan from a bank. Since this money is not your property, the transaction takes the form of a contract for the sale and purchase at the expense of credit funds. After registration, the borrower actually becomes the owner of the apartment, but at the same time, the living space is pledged to the bank, since the loan has not yet been repaid.
Mortgage by contract: what is it?
This type of pledge arises in cases that do not involve the activation of the mortgage by virtue of the law. The basis for the formation of a mortgage by virtue of an agreement is the conclusion between the parties of an agreement (agreement) on the pledge of immovable property. The document and the obligations specified in it come into force from the moment of its state registration. To be registered, the pledgor and the pledgee must write a joint application. The pledge agreement is not an independent obligation and is concluded simultaneously with the loan agreement.
Let's bring specific example. Let's say you want to take out a large loan from the bank that you plan to spend on expensive equipment. You go to the bank, take out a loan, sign an agreement and at the same time draw up a mortgage agreement indicating that your apartment is pledged to the bank.
Differences between the two types of mortgages
There is a fundamental difference between these concepts. The main differences are as follows:
- A condition for issuing a loan in case of a mortgage by virtue of an agreement is the provision of property already owned by the borrower as collateral. Mortgage, by virtue of the law, determines the collateral of recently acquired property for targeted credit funds.
- Money borrowed from a mortgage by virtue of the law can only be spent for a specific purpose specified in the documents. The pledge by virtue of the contract allows you to dispose of the loan at your discretion.
IN Lately Mortgage has become widespread among borrowers, because it allows you to take funds from a bank or other financial institutions on the favorable conditions. The main purpose of registration of a pledge is the acquisition of real estate, which will be bank collateral.
Registration of a mortgage agreement; Be careful when drawing up contracts; Is it worth it to arrange a mortgage?
Among the many ways to take an apartment on credit, a mortgage by virtue of the law is the most controversial and risky method. But sometimes this method is the only possible one for both the borrower and the lender.
What types of mortgages exist
If real estate is purchased at the expense of credit funds, then there are two legislative options for registering an encumbrance, two: a mortgage by virtue of law and by virtue of an agreement: the differences between these methods are small, but fundamental.
When registering real estate as a pledge under the mortgage procedure by virtue of an agreement, information about the encumbrance is entered into the register on the basis of a pledge (mortgage) agreement simultaneously with the registration of an agreement on the acquisition of real estate. In this case, a mortgage agreement is always drawn up or a mortgage is issued.
Mortgage by virtue of the law of the Civil Code of the Russian Federation is defined as the state registration of a contract for the purchase of real estate, containing a mortgage obligation. It can be any kind of agreement, but most often it is a contract of sale. The extract on the rights to such an object will indicate the existing restrictions on the encumbrance of the right: mortgage by virtue of law.
What does legal mortgage mean?
Legislatively, mortgage issues are regulated by the Federal Law “On State Registration of Rights to Real Estate and Transactions with It” No. 122-FZ of July 21, 1997, as well as the Federal Law “On Mortgage (Pledge of Real Estate)” No. 102-FZ of July 16, 1998.
The basis for creating an entry in the register of encumbrances is state registration sale and purchase agreement, which contains information that the purchase took place at the expense of borrowed funds.
talking in simple words, a mortgage obligation (encumbrance) is entered into the register when the new owner comes to the territorial office of Rosreestr with an agreement on the transfer of ownership rights to re-register the purchased property in his name.
If the information specified in the real estate purchase and sale agreement is not enough to enter an encumbrance in the state register, then the pledgor and the pledgee may submit a joint application for registering a mortgage obligation. It is accompanied by the relevant loan agreement or loan agreement.
By mutual agreement of the parties to the transaction, the registration of a mortgage encumbrance in Rosreestr may not be applied. For this purpose, a corresponding clause is prescribed in the contract for the sale of property.
Applications
Mortgages by force of law may arise in the following situations:
- Acquisition of land, apartments, other real estate at the expense of borrowed money, bank loan, target loan of a legal entity.
- Purchase, construction of a real estate object with full or partial payment at the expense of borrowed funds.
- Annuity or lifetime maintenance. In this case, the pledge right to the property is issued to the recipient of the rent.
- Registration of a pledge of property rights when buying real estate under construction.
Always read mortgages carefully and loan agreements so as not to fall into the hands of scammers. The real estate market, especially in major cities, is an illegal source of income for a huge number of criminal elements, so try to transact through well-known real estate agencies and reputable notaries.
Features of a mortgage by operation of law
It is difficult to outline the pros and cons of statutory bail, because potential contingencies can be both negative and positive, depending on whose point of view to take as a basis.
Consider the main pitfalls in the execution of a mortgage obligation under the law.
1. Drafting single agreement purchase and sale of real estate. The absence of a mortgage agreement reduces financial expenses buyer and seller in the transaction, but carries risks for the creditor, who does not have security rights before registering the contract with Rosreestr.
In addition, there is a possibility of a subsequent challenge to the purchase of real estate in court, as a result of which the premises are returned to the seller, and the loan, along with the mortgage record in the USRR, continues to remain with the buyer-borrower.
2. The risk of non-payment of the mortgage record after the loan is repaid. A situation may arise when the buyer has fully repaid the loan amount, but cannot confirm this fact due to the absence or disappearance of the lender, combined with a lack of supporting documents. As a result, the pledge can become “perpetual”, and it becomes almost impossible to circumvent the existing restrictions on the encumbrance of the right (mortgage by virtue of law).
3. Termination of the mortgage until the full repayment of the entire loan amount. This situation may arise if the property was sold due to non-payment of the loan by the borrower.
After the sale of the mortgaged property, the borrower's obligations to the bank are considered repaid. However, the proceeds from the sale may not be enough to repay the balance of the loan. In this situation, the bank becomes the affected party.
4. Challenging a mortgage. Due to the low legal knowledge of the population, many do not understand the essence of the documents signed when buying real estate. As a result, people believe that the sale and purchase agreement is not a basis for a pledge of property and try to challenge its validity in court. As a result, undesirable litigation for the creditor arises.