The main mortgage is a contract where the financial institution obtains a residential or commercial property committed to the fulfillment of his/her debt in kind, whereby he or she may use to regular financial institutions and the following financial institutions in order to get the right of the rate of that residential or commercial property in any hand.

The home loan is an agreement concluded in between the mortgagor and the mortgagee creditor which grants the mortgagee right in rapid eye movement in the residential or commercial property, with all benefits and genuine security over the mortgage item. 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 however is limited in their disposal rights to make sure the mortgagee's interests are secured.

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

The main mortgage is produced through an official agreement, that should be notarized in a notary public office.

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

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

The commitments 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 bound to deliver 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 used to the mortgagor's responsibility to deliver the mortgage item to the mortgagee.
If the mortgaged residential or commercial property is gone back to the mortgager's ownership, the home mortgage shall be ended, unless the mortgagee proves that the residential or commercial property has been returned for a reason not planned to end the mortgage.

The mortgagor ensures the stability and enforceability of the home loan, and the mortgagor shall not take any action that reduces the worth of the home loan or hinders the financial institution's exercise of his rights under the agreement. In case of seriousness, the mortgagee lender may take all required steps at the mortgager's cost, to maintain the home mortgage item. The mortgagor will be accountable for the loss or damage of the mortgage item if such loss or damage is due to his fault or arises from force majeure act.

The arrangements of Articles No. 1048 and No. 1049 concerning 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 mortgage product to any replaced rights will use to the possessory mortgage.

The Mortgagee's responsibility:

Upon receiving the mortgaged residential or commercial property, the mortgagee is obliged to exercise the same level of care and maintenance in its preservation as would a prudent individual. and he is responsible 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 permitted to obtain any take advantage of the home mortgage item without settlement, he needs to invest it totally unless otherwise agreed Any net earnings or advantage derived by the financial institution from the usage of the mortgage product shall be deducted from the amount protected by the mortgage, even if the due date has actually not yet come, supplied that the deduction will 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 financial obligation.

If the home loan item produces revenue and the celebrations concur that all or part of the revenue will be utilized to offset the interest, in, this arrangement shall stand within the optimum limitations of legally allowable legal interest.

The mortgagee shall presume the management of the mortgaged residential or commercial property, and he must exercise in that the care of a sensible individual. The mortgagee can not modify the mortgage item's use without the mortgager's approval. He must immediately alert the mortgagor of any matter requiring 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 put under custody or to recover it upon payment of the arrearage. if the quantity secured by the home mortgage does not bear interest and has not yet become due, the mortgagee is entitled just to staying quantity after subtracting the worth of interest determined at the legal rate for the period between the day of payment and the due date of the debt.

The mortgagee will return the mortgaged item to the mortgagor after the mortgagor has completely released their commitment consisting of all expenditures and compensation associated to the right.

Effects of the official mortgage in the Egyptian law

The effect of the home mortgage 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 impair the mortgagee's right.

The mortgagor keeps the right to manage the mortgaged residential or commercial property and to gather its returns and leases given 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 method, or it was concluded after notarizing the notice and the lease was not paid ahead of time, so it will not be effective unless it can be thought about part of the excellent management work. If the lease term prior to notarizing the home loan notice exceeds nine years, it will not work against the mortgagee financial institution except for a period of 9 years just unless it was registered before the home mortgage was registered.

The mortgagor is accountable for making sure the security of the mortgage residential or commercial property. The mortgagee creditor has the right to object to any actions or negligence by the mortgagor that might considerably lessen the value or safety of the residential or commercial property, and in urgent cases the mortgagee might take essential protective steps and seek repayment from the mortgagor, from any costs incurred.

If the mortgagor negligently causes the damage or damage of the mortgaged residential or commercial property, the mortgagee financial institution has the option to demand adequate insurance to cover the loss or to right away collect the complete arrearage.

When the damage or damage to the mortgaged residential or commercial property is triggered by an external aspect and the mortgagee contradicts the debt without insurance, the mortgagor has the choice to supply adequate insurance coverage 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 amount without legal interest for the period between the actual payment date and the initial due date.

Secondly: The mortgagee creditor:

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

Upon informing the debtor of the arrearage, the mortgagee can foreclose on the mortgaged residential or commercial property and requests its sale in accordance with the treatments and timelines stipulated in code of Civil Procedures. If the mortgagor is a third celebration other than the debtor, he can avoid any foreclosure procedures by voluntarily giving up the mortgaged residential or commercial property according to the treatments and guidelines governing residential or commercial property surrender.

Any contract that grants the mortgagee the right to take ownership of the mortgaged residential or commercial property at a fixed cost upon debt default or to offer it without following the lawfully mandated treatments is invalid, even if participated in after the home mortgage agreement. However, after the debt or a portion of it has actually matured, the debtor and mortgagee can agree that the debtor will move the mortgaged residential or commercial property to the mortgagee in fulfillment of his debt.

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

An official home loan is just enforceable against 3rd parties if the mortgage contract or judgment establishing the mortgage is signed up before the third celebration acquires a right in rem in the residential or commercial property. This is without bias to the provisions of bankruptcy laws.

Additionally, third parties can not assert claims based on an unregistered safe right, the replacement of one creditor for another in this right, or the project of registration concern to another creditor unless such actions are noted in the margin of the initial registration.

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

The termination of the main home loan:

An official mortgage ends upon the fulfillment of the secured debt or the nullification of the underlying cause for the debt. However, any bona fide rights obtained by 3rd celebrations throughout the duration between the home mortgage's expiration and its potential reinstatement remain unaffected.

If foreclosure procedures are finished, the main mortgage is definitively extinguished, even if the residential or commercial property ownership changes 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.