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The official mortgage is an agreement whereby the lender gets a residential or commercial property devoted to the satisfaction of his/her financial obligation in kind, whereby he or she may apply to regular lenders and the following creditors in order to acquire the right of the price of that residential or commercial property in any hand.

The home loan is a contract concluded in between the mortgagor and the mortgagee creditor which approves the mortgagee right in rapid eye movement in the residential or commercial property, with all advantages and real security over the home loan product. Additionally, the mortgagor can follow the mortgaged residential or commercial property if it is transferred to a 3rd party. The mortgagor retains ownership and ownership of the mortgaged residential or commercial property but is restricted in their disposal rights to guarantee the mortgagee's interests are safeguarded.

The difference in between the official mortgage and the possessory home mortgage

The official home mortgage is developed through a main agreement, that need to be notarized in a notary public office.

While the right of possessory mortgage is created through informal contract. Whereas the ownership and ownership of the mortgaged residential or commercial property in the official home loan right remains in the hand of the owner (debtor), and the belongings in the possessory home loan is moved to the financial institution.

The official home loan is limited to realty, while the possessory home mortgage can cover both realties and movable residential or commercial properties.

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

The Egyptian Civil Law No. 131 of 1948 and its modifications regulate the commitments of the mortgagor and mortgagee in Two as follows:
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The Mortgager's commitments:

The mortgagor is obliged to provide the mortgaged residential or commercial property to the creditor or to a designated representative selected by both Parties in the contract.

The legal requirement for a seller to provide a sold item will be used to the mortgagor's obligation to provide the home loan item to the mortgagee. If the mortgaged residential or commercial property is gone back to the mortgager's possession, the home loan will be expired, unless the mortgagee shows that the residential or commercial property has actually been returned for a reason not meant to expire the mortgage.

The mortgagor ensures the integrity and enforceability of the mortgage, and the mortgagor will not take any action that decreases the value of the home mortgage or hinders the lender's exercise of his rights under the contract. In case of urgency, the mortgagee creditor may take all required measures at the mortgager's expense, to maintain the home loan product. The mortgagor will be responsible for the loss or damage of the home loan product if such loss or damage is because of his fault or arises from force majeure act.

The provisions of Articles No. 1048 and No. 1049 concerning the loss or damage of the mortgaged residential or commercial property under a main mortgage, and the transfer of the financial institution's right from the home mortgage item to any replaced rights will apply to the possessory mortgage.

The Mortgagee's obligation:

Upon receiving the mortgaged residential or commercial property, the mortgagee is bound to work out the same level of care and maintenance in its conservation as would a prudent individual. and he is liable for the loss or damage of the home mortgage product unless it is proven that such loss or damage was brought on by an external element beyond his control.

The mortgagee is not permitted to derive any gain from the mortgage item without settlement, he should invest it totally unless otherwise concurred Any net profits or benefit obtained by the creditor from the use of the home mortgage product shall be subtracted from the quantity protected by the mortgage, even if the due date has actually not yet come, offered that the deduction shall be made from the cost of preserving and fixing the residential or commercial property and its repairs, then from expenses and interest, and then from the principal of the debt.

If the home loan product produces profits and the parties concur that all or part of the earnings will be used to balance out the interest, in, this arrangement shall stand within the maximum limitations of legally permissible legal interest.

The mortgagee will assume the management of the mortgaged residential or commercial property, and he should work out in that the care of a sensible person. The mortgagee can not modify the mortgage product's usage without the mortgager's approval. He must quickly notify the mortgagor of any matter requiring his intervention.

If the mortgagee abuses this right, mis-manages the residential or commercial property, or devotes gross carelessness, the mortgagor has the right to demand that the item be positioned under custody or to recover it upon payment of the arrearage. if the amount protected by the mortgage does not bear interest and has not yet ended up being due, the mortgagee is entitled only to staying quantity after subtracting the worth of interest computed at the legal rate for the period in between the day of payment and the due date of the financial obligation.

The mortgagee shall return the mortgaged item to the mortgagor after the mortgagor has completely discharged their obligation consisting of all expenses and settlement associated to the right.

Effects of the official home loan in the Egyptian law

The effect of the home loan in between the contracting parties:

Firstly: The mortgager:

The mortgagor might get rid of 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 gather its returns and leases granted by the mortgagor are not enforceable versus the mortgagee unless it was notarized before the registration of the expropriation notification.

However, if the lease was not notarized in this way, or it was concluded after notarizing the notice and the lease was not paid beforehand, so it will not work unless it can be considered part of the great management work. If the lease term prior to notarizing the home mortgage notification surpasses 9 years, it will not be effective versus the mortgagee lender except for a period of 9 years only unless it was registered before the mortgage was registered.

The mortgagor is accountable for making sure the safety of the mortgage residential or commercial property. The mortgagee lender has the right to object to any actions or carelessness by the mortgagor that could significantly reduce the value or safety of the residential or commercial property, and in urgent cases the mortgagee may take necessary protective steps and seek repayment from the mortgagor, from any costs incurred.

If the mortgagor negligently triggers the damage or damage of the mortgaged residential or commercial property, the mortgagee lender has the option to require appropriate insurance coverage to cover the loss or to instantly collect the full exceptional financial obligation.

When the damage or damage to the mortgaged residential or commercial property is brought on by an external aspect and the mortgagee contradicts the debt without insurance coverage, the mortgagor has the option to offer appropriate insurance or settle the financial obligation right away before the due date. If the financial obligation has no interest, the mortgagee is just entitled to the primary quantity without legal interest for the duration in between the real payment date and the original due date.

Secondly: The mortgagee financial institution:

A third-party mortgagor's personal properties are exempt from seizure for the debtor's financial obligation. The mortgagor can not substitute payments for the debtor unless concurred upon.

Upon alerting the debtor of the arrearage, the mortgagee has the right to foreclose on the mortgaged residential or commercial property and demands its sale in accordance with the treatments and timelines specified in code of Civil Procedures. If the mortgagor is a third celebration besides the debtor, he can prevent any foreclosure procedures by willingly surrendering the mortgaged residential or commercial property according to the procedures and rules governing residential or commercial property surrender.

Any arrangement that grants the mortgagee the right to take ownership of the mortgaged residential or commercial property at a predetermined 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 contract. However, after the financial obligation or a portion of it has matured, the debtor and mortgagee can agree that the debtor will move the mortgaged residential or commercial property to the mortgagee in satisfaction of his debt.

The official home mortgage and its impact to the third celebration:

A main home mortgage is just enforceable versus 3rd celebrations if the home loan agreement or judgment establishing the mortgage is registered before the 3rd party acquires a right in rapid eye movement in the residential or commercial property. This is without prejudice to the arrangements of insolvency laws.

Additionally, 3rd parties can not assert claims based upon an unregistered guaranteed right, the alternative of one creditor for another in this right, or the assignment of registration top priority to another lender unless such actions are noted in the margin of the original registration.

The treatments for registration, renewal, cancellation, and cancellation a main mortgage, along with the effects thereof, are governed by the arrangements of the Real Estate Registration Law. The costs of registration, renewal, and cancellation of an official home loan are borne by the mortgagor unless otherwise agreed upon.

The termination of the main home loan:

A main home loan ends upon the fulfillment of the secured debt or the nullification of the underlying cause for the debt. However, any bona fide rights acquired by 3rd parties throughout the period in between the mortgage's expiration and its potential reinstatement remain unaffected.

If foreclosure proceedings are finished, the official home mortgage is definitively snuffed out, even if the residential or commercial property ownership modifications hands. When the mortgaged residential or commercial property is sold through a forced auction, the mortgage rights expire upon the deposit of the auction proceeds or their payment to qualified registered financial institutions.
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