The main mortgage is a contract where the lender obtains a residential or commercial property devoted to the satisfaction of his/her debt in kind, whereby she or he might use to ordinary creditors and the following financial institutions in order to get the right of the cost of that residential or commercial property in any hand.

The mortgage is an agreement concluded in between the mortgagor and the mortgagee financial institution which gives the mortgagee right in rem in the residential or commercial property, with all benefits and real security over the home mortgage item. Additionally, the mortgagor can follow the mortgaged residential or commercial property if it is moved to a third celebration. The mortgagor keeps ownership and possession of the mortgaged residential or commercial property however is restricted in their disposal rights to ensure the mortgagee's interests are protected.

The distinction in between the main mortgage and the possessory mortgage

The main home mortgage is created through an official contract, that must be notarized in a notary public office.

While the right of possessory home mortgage is developed through informal contract. Whereas the ownership and possession of the mortgaged residential or commercial property in the official home mortgage right remains in the hand of the owner (debtor), and the belongings in the possessory mortgage is transferred to the creditor.

The main home loan is restricted to real estate, while the possessory home loan can cover both realties and movable residential or commercial properties.

The obligations of the mortgagor and the mortgagee financial institution in the main home loan

The Egyptian Civil Law No. 131 of 1948 and its changes regulate the responsibilities of the mortgagor and mortgagee in Chapter Two as follows:

The Mortgager's responsibilities:

The mortgagor is obliged to provide the mortgaged residential or commercial property to the lender or to a designated agent selected by both Parties in the agreement.

The legal requirement for a seller to deliver a sold product will be applied to the mortgagor's responsibility to provide the home loan item to the mortgagee. If the mortgaged residential or commercial property is gone back to the mortgager's belongings, the mortgage shall be expired, unless the mortgagee proves that the residential or commercial property has actually been returned for a factor not meant to expire the mortgage.

The mortgagor ensures the stability and enforceability of the mortgage, and the mortgagor will not take any action that reduces the value of the home loan or hampers the lender's workout of his rights under the contract. In case of seriousness, the mortgagee lender may take all essential measures at the mortgager's expenditure, to preserve the home mortgage product. The mortgagor will be responsible for the loss or damage of the home mortgage item if such loss or damage is due to his fault or develops from force majeure act.

The provisions of Articles No. 1048 and No. 1049 regarding the loss or damage of the mortgaged residential or commercial property under an official home mortgage, and the transfer of the creditor's right from the mortgage item to any replaced rights shall use to the possessory home loan.

The Mortgagee's responsibility:

Upon getting the mortgaged residential or commercial property, the mortgagee is bound to work out the same level of care and upkeep in its preservation as would a prudent individual. and he is responsible for the loss or damage of the home loan product unless it is shown that such loss or damage was brought on by an external factor beyond his control.

The mortgagee is not permitted to obtain any benefit from the mortgage product without payment, he must invest it fully unless otherwise concurred Any net profits or benefit derived by the creditor from the use of the home loan product will be deducted from the amount protected by the mortgage, even if the due date has not yet come, provided that the deduction will be made from the expense of preserving and fixing the residential or commercial property and its repair work, then from expenses and interest, and then from the principal of the financial obligation.

If the mortgage product produces revenue and the celebrations concur that all or part of the revenue will be utilized to balance out the interest, in, this agreement will be legitimate within the optimum limits of legally allowable contractual interest.

The mortgagee will presume the management of the mortgaged residential or commercial property, and he must work out because the care of a sensible individual. The mortgagee can not customize the home mortgage item's usage without the mortgager's approval. He must immediately notify the mortgagor of any matter needing his intervention.

If the mortgagee abuses this right, mis-manages the residential or commercial property, or devotes gross negligence, the mortgagor can request that the item be placed under custody or to reclaim it upon payment of the impressive financial obligation. if the amount protected by the home loan does not bear interest and has actually not yet ended up being due, the mortgagee is entitled only to remaining amount after deducting the worth of interest determined at the legal rate for the period in between the day of payment and the due date of the debt.

The mortgagee will return the mortgaged product to the mortgagor after the mortgagor has fully released their commitment including all expenses and payment related to the right.

Effects of the main home mortgage in the Egyptian law

The effect of the home mortgage between the contracting celebrations:

Firstly: The mortgager:

The mortgagor might deal with the mortgaged residential or commercial property as long as such actions do not hinder the mortgagee's right.

The mortgagor retains the right to handle the mortgaged residential or commercial property and to collect its returns and leases approved by the mortgagor are not enforceable against the mortgagee unless it was notarized before the registration of the expropriation notice.

However, if the lease was not notarized in this way, or it was concluded after notarizing the notice and the rent was not paid ahead of time, so it will not work unless it can be considered part of the good management work. If the lease term prior to notarizing the mortgage notice exceeds 9 years, it will not work versus the mortgagee creditor other than for a duration of 9 years just unless it was signed up before the home mortgage was registered.

The mortgagor is accountable for guaranteeing the security of the home mortgage residential or commercial property. The mortgagee lender has the right to challenge any actions or neglect by the mortgagor that could considerably lessen the value or safety of the residential or commercial property, and in immediate cases the mortgagee might take required protective measures and look for reimbursement from the mortgagor, from any expenditures sustained.

If the mortgagor negligently triggers the damage or damage of the mortgaged residential or commercial property, the mortgagee creditor has the choice to require adequate insurance to cover the loss or to instantly gather the complete outstanding debt.

When the destruction or damage to the mortgaged residential or commercial property is brought on by an external factor and the mortgagee declines to accept the financial obligation without insurance coverage, the mortgagor has the option to provide sufficient insurance or pay off the debt immediately before the due date. If the debt has no interest, the mortgagee is just entitled to the primary amount without legal interest for the period in between the real payment date and the initial due date.

Secondly: The mortgagee financial institution:

A third-party mortgagor's individual assets are exempt from seizure for the debtor's debt. The mortgagor can not substitute payments for the debtor unless agreed upon.

Upon informing the debtor of the arrearage, the mortgagee has the right to foreclose on the mortgaged residential or commercial property and requests its sale in accordance with the procedures and timelines stipulated in code of Civil Procedures. If the mortgagor is a third party besides the debtor, he can avoid any foreclosure procedures by willingly giving up the mortgaged residential or commercial property according to the procedures and rules governing residential or commercial property surrender.

Any contract that gives the the right to take ownership of the mortgaged residential or commercial property at an established cost upon financial obligation default or to sell it without following the legally mandated procedures is void, even if participated in after the home mortgage arrangement. However, after the financial obligation or a portion of it has grown, the debtor and mortgagee can agree that the debtor will transfer the mortgaged residential or commercial property to the mortgagee in satisfaction of his debt.

The main home loan and its impact to the 3rd party:

A main home mortgage is only enforceable against 3rd parties if the home mortgage contract or judgment establishing the home mortgage is signed up before the 3rd celebration gets a right in rapid eye movement in the residential or commercial property. This is without bias to the provisions of insolvency laws.

Additionally, third parties can not assert claims based upon an unregistered protected right, the substitution of one financial institution for another in this right, or the project of registration top priority to another financial institution unless such actions are kept in mind in the margin of the initial registration.

The treatments for registration, renewal, cancellation, and cancellation a main home mortgage, in addition to the impacts thereof, are governed by the provisions of the Real Estate Registration Law. The costs of registration, renewal, and cancellation of a main home loan are borne by the mortgagor unless otherwise concurred upon.

The termination of the main home loan:

A main home mortgage ends upon the fulfillment of the protected debt or the nullification of the underlying cause for the debt. However, any authentic rights gotten by 3rd parties during the duration in between the home loan's expiration and its possible reinstatement stay unaffected.

If foreclosure procedures are finished, the official mortgage is definitively extinguished, even if the residential or commercial property ownership modifications hands. When the mortgaged residential or commercial property is offered through a forced auction, the mortgage rights end upon the deposit of the auction continues or their payment to eligible registered financial institutions.
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