What Is an Equitable Mortgage?

Repeated mortgages refer to the form of mortgage in which the debtor uses the same collateral for several creditors as collateral, resulting in multiple mortgages on the collateral. This type of mortgage has different characteristics from ordinary mortgages in various aspects, such as the establishment of the mortgage, the scope of the guarantee, and the order of the mortgage.

Duplicate mortgage

Right!

Repeated mortgages refer to the form of mortgage in which the debtor uses the same collateral for several creditors as collateral, resulting in multiple mortgages on the collateral. This type of mortgage has different characteristics from ordinary mortgages in various aspects, such as the establishment of the mortgage, the scope of the guarantee, and the order of the mortgage.

Chinese name

Duplicate mortgage

Foreign name

repeated mortgage

Types of

Behavior, form

Object

debtor

Security law ^[1]

according to

Article 46 of the Guarantee Law stipulates that when setting up a mortgage, creditors and debtors may agree in writing on the scope of the mortgage guarantee. If there is no agreement, the scope of the mortgage guarantee includes the main creditor's rights, interest, liquidated damages, damages and the cost of realizing the mortgage. The parties may agree on the scope of the guarantee in the following two situations:

In repeated mortgages, the way to determine the scope of the mortgage guarantee depends on the different orientations of choosing between the interests of each mortgagee, as well as the pros and cons of each party's status when the creditor's rights are established. select. In addition, if a fixed amount of guarantee is adopted, the parties only need to specify the scope of the mortgage guarantee in the mortgage contract. Therefore, paragraph (a) of Article 39 of the Guarantee Law on the contents of the mortgage contract shall be the secured principal debt "Type, amount" is naturally unnecessary. Since Article 39 of the Guarantee Law is a mandatory specification, it also covers the scope that should not be covered, that is, the mortgage contract with a fixed guarantee scope. Therefore, it is an implicit loophole in the legal loophole. According to the legislative purpose, the provisions of the guarantee law on the contents of the mortgage contract are intended to guarantee the legality and validity of the mortgage contract to protect the interests of the parties. The "mortgage contract" in this document only refers to a mortgage contract with a floating guarantee scope.

In addition, the parties shall register the scope of the mortgage guarantee together when registering the mortgage. However, the cost of implementing the mortgage right does not need to be registered and falls within the scope of mortgage guarantee. The delayed interest is a collateral debt that naturally occurs in law, and it does not require registration to fall into the scope of mortgage guarantee.

In repeated mortgages, the prior order mortgage rights are eliminated due to reasons such as settlement, invalidity, and whether the subsequent order mortgage rights have replaced their order directly affects the interests of the subsequent order mortgagee and the mortgagor. Regarding the order of the subsequent mortgagee, the laws of each country adopt two different legislative systems. One is to adopt sequential ascentivism, such as France, Japan, and Taiwan of our country; the other is to adopt sequential orderism, such as Germany and Switzerland. The so-called ascending orderism means that after the order of the previous mortgage is eliminated, the order of the later mortgage is of course raised to its place. Order fixedism refers to mortgages of different orders with independent values. When the creditor's rights attached to a mortgage are extinguished, the mortgage is transferred to the owner of the mortgage, and the order of the subsequent mortgagee remains unchanged.

In recent years, in many countries that have adopted ascendantism, such as France and Japan, many scholars believe that it is necessary to change ascendantism to fixedism. The reason is probably as follows: Under the ascending order doctrine, the former mortgagee was only the priority of the remaining residual value of the mortgagee after being paid off. This situation did not occur due to the efforts of the mortgagee who ordered the mortgage, which made him jump into the sequence. In fact, the scope of the collateral covered by his mortgage has increased, so that his debts will be paid preferentially. Unexpected profit. At the same time, due to the high risk of the subsequent mortgage, it may not be fully paid due to the realization of the subsequent mortgage, so the conditions for the subsequent mortgage are usually harsher, such as high interest and high liquidated damages. Because of the elimination of the pre-order mortgage, the risk is completely eliminated, allowing him to enjoy high benefits in a risk-free situation and unfair to the debtor. Therefore, it is believed that the ascendantism should be changed to fixedism.

From the opinions of the scholars mentioned above, it can be seen that the ascending order is negative.

In repeated mortgages, the order of each mortgagee is the key to determining whether the security interests of each mortgagee can be realized. The so-called assignment and abandonment of the order of mortgage rights refers to the act of assigning or discarding the order by the first-order mortgagee for the benefit of the latter-order mortgagee. The system design of the whole sequence of transfer and abandonment should also take the theory of relative effectiveness as the core and the principle of not affecting the interests of the mortgagor and other mortgagees. In the transfer of the order of the mortgage rights, the effect of the transferee and the assignee's external mortgage rights remains unchanged, and they still participate in the distribution in the original order. After the total amount of the two persons participating in the distribution is determined, within this total amount, the assignee can get the priority of its secured claims to be settled. It can be seen that the assignment of the mortgage order is purely the internal relationship between the assignor and the assignee. After the order of the mortgage rights is abandoned, the abandoner and the abandoned person become the same order, that is, the total amount of the distribution funds that the two can obtain for their respective mortgage rights is distributed in proportion to the amount of the guaranteed debt. Its effectiveness does not affect other stakeholders.

The two parties establish a relationship between the assignment and abandonment of the mortgage right, so that the two original mortgage rights are closely linked into one. When any one of the mortgage rights is violated from the outside, it will lead to the loss of the interests of both parties, so both parties will protect their own interests. Set out to maintain its mortgage right externally, and because the transfer and abandonment of the order of the mortgage rights do not affect the interests of other stakeholders, the assignment and abandonment of the mortgage right does not need to be registered in the property right register, only by the transfer and It is sufficient to abandon the parties to agree on the rights and obligations of both parties in the form of a contract.

In repeated mortgages, the position of the subsequent mortgagee is obviously inferior to that of the previous mortgagee. Although he can be compensated by raising the conditions for lending, he still needs special protection.

1. The low status of the subsequent mortgage is concentrated in the fact that it assumes the risk of the reduction of the value of the mortgaged property if the implementation of the previous mortgage is carried out. Among them, the scope of the security interest borne by the pre-emptive mortgage has a great impact on this risk. Therefore, after the establishment of the subsequent mortgage, the prior mortgagee and the creditor agree to change the guarantee, thereby increasing the burden of the mortgaged property, and its effectiveness should be inferior to the subsequent mortgage. This is also in line with the principle of prior registration when mortgage rights are realized. Because the change registration is after the registration of the subsequent mortgage, the effect of this change naturally cannot take precedence over the subsequent mortgage. If it is really necessary to change the scope of guarantee, the subsequent mortgagee has the right to request a corresponding change in the conditions of lending to balance the increase in risk.

2. According to Article 51 of the Guarantee Law, when the mortgagor and a third party infringe on the collateral and cause the value of the collateral to be lost, the mortgagee has the right to require the mortgagor to restore the value of the collateral, or provide and reduce the value Corresponding guarantee. In practice, because the value of the collateral may far exceed the amount of the secured creditor's rights of the prior mortgagee, the loss of the mortgage will not endanger the interests of the prior mortgagee, so the prior mortgagee will be negligent. Security of collateral. This goes against the principle of good faith. Since the order of the subsequent mortgages is behind, the loss of the collateral may jeopardize their interests. At this time, the latter mortgagee requests the mortgagor or a third party to restore the collateral, or provides them with new guarantees, and the benefits they request. It should only be effective for itself and not as good as the prior mortgagee. This can not only avoid the loss of the mortgage of the subsequent mortgagee, but also encourage the mortgagee to actively assert their rights, and also have a certain disciplinary effect on the former mortgagee who is negligent in exercising their rights.

3. After the subsequent mortgagee establishes the mortgage, the debtor transfers part of his debt with the prior mortgagee's consent. Due to the indivisibility of the mortgage, the collateral still guarantees the entire creditor's right, which may be caused by the bad credit of the new debtor, If the transferred debt is not fulfilled, the possibility that the mortgagee will exercise the mortgage right will increase the risk of the subsequent debtor. Post-sequence mortgagee risk is increased due to the actions of pre-sequence mortgagee and debtor, and it is unfair to receive uninterest. Therefore, it should be stipulated that after the establishment of the subsequent mortgage, the debtor must also obtain the consent of the subsequent mortgage when transferring the debt.

First, the right to receive interest

Second, the mortgagor has certain punishment rights, such as continuing to set up a mortgage ^[2] , and transferring it with consent, etc.

Third, it can be rented.