The main mortgage is an agreement where the financial institution acquires a residential or commercial property committed to the fulfillment of his or her debt in kind, where she or he might use to normal lenders and the following lenders in order to obtain the right of the rate of that residential or commercial property in any hand.

The home loan is a contract concluded between the mortgagor and the mortgagee lender which gives the mortgagee right in rem in the residential or commercial property, with all benefits and genuine 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 maintains ownership and ownership of the mortgaged residential or commercial property but is restricted in their disposal rights to ensure the mortgagee's interests are safeguarded.

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

The official mortgage is created through an official contract, that need to be notarized in a notary public workplace.

While the right of possessory home loan is produced through informal agreement. Whereas the ownership and possession of the mortgaged residential or commercial property in the official mortgage right stays in the hand of the owner (debtor), and the ownership in the possessory home mortgage is transferred to the creditor.

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

The obligations of the mortgagor and the mortgagee financial institution in the official mortgage

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

The Mortgager's obligations:

The mortgagor is obligated to provide the mortgaged residential or commercial property to the financial institution or to a designated agent chosen by both Parties in the agreement.

The legal requirement for a seller to deliver an offered item will be applied to the mortgagor's responsibility to provide the home mortgage item to the mortgagee. If the mortgaged residential or commercial property is gone back to the mortgager's belongings, the home loan will be ended, unless the mortgagee shows that the residential or commercial property has actually been returned for a reason not intended to end the home loan.

The mortgagor ensures the stability and enforceability of the home loan, and the mortgagor will not take any action that diminishes the value of the home mortgage or restrains the creditor's exercise of his rights under the agreement. In case of urgency, the mortgagee lender may take all needed procedures at the mortgager's expense, to maintain the home loan product. The mortgagor shall be accountable for the loss or damage of the mortgage item if such loss or damage is because of his fault or occurs 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 loan, and the transfer of the creditor's right from the home mortgage item to any replaced rights will apply to the possessory home loan.

The Mortgagee's obligation:

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

The mortgagee is not allowed to derive any gain from the home mortgage product without compensation, he should invest it fully unless otherwise agreed Any net earnings or benefit derived by the lender from using the home loan item shall be subtracted from the amount protected by the home loan, even if the due date has not yet come, offered that the reduction shall be made from the expense of preserving and repairing the residential or commercial property and its repairs, then from expenditures and interest, and then from the principal of the debt.

If the mortgage product produces revenue and the celebrations concur that all or part of the profits will be utilized to balance out the interest, in, this agreement will be valid within the optimum limitations of legally permissible legal interest.

The mortgagee shall assume the management of the mortgaged residential or commercial property, and he must exercise because the care of a sensible individual. The mortgagee can not customize the home loan product's usage without the mortgager's approval. He must without delay inform the mortgagor of any matter needing his intervention.

If the mortgagee abuses this right, mis-manages the residential or commercial property, or commits gross neglect, the mortgagor can demand that the item be positioned under custody or to reclaim it upon payment of the arrearage. if the quantity protected by the home mortgage does not bear interest and has not yet become due, the mortgagee is entitled just to staying amount after deducting the value of interest calculated at the legal rate for the duration 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 discharged their responsibility including all expenses and compensation related to the right.

Effects of the official mortgage in the Egyptian law

The result of the mortgage in between the contracting celebrations:

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 collect its returns and leases given 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 method, or it was concluded after notarizing the notification and the lease was not paid ahead of time, so it will not be efficient unless it can be considered part of the great management work. If the lease term prior to notarizing the home mortgage notice goes beyond nine years, it will not be efficient against the mortgagee creditor except for a duration of 9 years only unless it was registered before the mortgage was registered.

The mortgagor is accountable for ensuring the safety of the home mortgage residential or commercial property. The mortgagee lender deserves to object to any actions or carelessness by the mortgagor that might considerably diminish the value or safety of the residential or commercial property, and in immediate cases the mortgagee may take necessary protective procedures and look for compensation from the mortgagor, from any costs incurred.

If the mortgagor negligently causes the destruction or damage of the mortgaged residential or commercial property, the mortgagee lender has the choice to demand appropriate insurance coverage to cover the loss or to instantly gather the complete outstanding financial obligation.

When the damage or damage to the mortgaged residential or commercial property is triggered by an external factor and the mortgagee contradicts the debt without insurance coverage, the mortgagor has the alternative to offer appropriate insurance or pay off the financial obligation immediately before the due date. If the debt has no interest, the mortgagee is only entitled to the primary quantity without legal interest for the duration between the real payment date and the original due date.

Secondly: The mortgagee lender:

A third-party mortgagor's individual properties are exempt from seizure for the debtor's debt. The mortgagor can not replace payments for the debtor unless concurred upon.

Upon notifying the debtor of the arrearage, the mortgagee can foreclose on the mortgaged residential or commercial property and demands its sale in accordance with the treatments and timelines stated in code of Civil Procedures. If the mortgagor is a third party aside from the debtor, he can prevent any foreclosure procedures by voluntarily giving up the mortgaged residential or commercial property according to the treatments and rules governing residential or commercial property surrender.

Any contract that approves the mortgagee the right to take ownership of the mortgaged residential or commercial property at a predetermined cost upon debt default or to offer it without following the legally mandated treatments is void, even if gotten in into after the home mortgage arrangement. However, after the debt or a portion of it has grown, the debtor and mortgagee can agree that the debtor will move the mortgaged residential or commercial property to the mortgagee in satisfaction of his financial obligation.

The main home mortgage and its impact to the third party:

A main home loan is just enforceable against 3rd parties if the home mortgage agreement or judgment the home loan is signed up before the 3rd party gets a right in rem 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 safe right, the replacement of one creditor for another in this right, or the task of registration priority to another creditor unless such actions are kept in mind in the margin of the original registration.

The procedures for registration, renewal, cancellation, and cancellation an official home loan, as well as the results thereof, are governed by the provisions of the Real Estate Registration Law. The expenses of registration, renewal, and cancellation of an official home mortgage are borne by the mortgagor unless otherwise concurred upon.

The termination of the main home loan:

A main home loan terminates upon the fulfillment of the secured debt or the nullification of the underlying cause for the debt. However, any bona fide rights obtained by third celebrations throughout the period in between the home mortgage's expiration and its potential reinstatement stay untouched.

If foreclosure procedures are completed, the main mortgage is definitively extinguished, 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 end upon the deposit of the auction continues or their payment to eligible authorized creditors.