Letter mortgage

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What is corruption?

In German law, there are two types of basic debt. The Letter mortgage and the Encumbrance, In the case of a letter-based debt, a basic mortgage bond with a seal will be deposited with the relevant land registry office. The most important advantage is the particularly flexible handling of the assignments (for example, when the creditor is required or voluntarily changed). The mortgage is a special type of debt. It is used in an extended form. The letter is handed over to the creditor, so that he receives all rights to the specific letter-based debt. The transfer of a basic debt with a letter can be done by means of written cession as well as a letter transfer or oral assignment, as well as a letter transfer and a land register entry. Also the letter ground debt can be assigned, for it a written assignment declaration is presented. At the moment of the transfer of a basic debt letter, the assignment is legally binding. This basic debt is used less frequently than a basic mortgage, because 25% is higher in land register costs and thus a document can be lost. A rather expensive explanation of the corruption would then be necessary.

The Letteral Debt - A Land Lien

The mortgage is actually a mortgage right. It is always entered for a plot in the land register. In contrast to a landlord debt, which is only documented by an entry in the land register, the form of the basic debt results in the creation of a basic debt letter. This document creation is associated with higher costs.
The mortgage is generally deposited as collateral for a loan. In this case, the credit in question is granted by the banks for the respective property, which means that the direct mortgage is the direct hedge which is used to debit a property. Above all, in the case of long-term and very risky real estate loans as well as building loans, the basic debt is regarded as a standard security for the banks. Credit institutions thus hedge against payment violations.

On a foreclosure on the basis of the letter ground debt

The creditor (for example, the bank) is given the right to a foreclosure of the secured property and the property on which the debtor is liable if the debtor can not service payment obligations from his credit agreement. The proceeds from the enforcement are then used to pay the outstanding debts to the creditor. If the debtor has several liabilities with different creditors who have been secured with a basic debt, then the receivables are first used, which were first registered in the land register. Thus, the order of the entries in the land register determines which debts will be repaid first.
The peculiarity with such a basic debt is the preparation of a basic debt letter which the creditor receives. All relevant information is entered in the basic mortgage bond, which are also in the land register. The rights to a basic debt are transferred to the creditor concerned by handing over the basic mortgage bond. The basic debt with a letter can simply be transferred to other creditors by written assignment, which can be notarized if desired. However, a transfer of the letter is not necessarily recorded explicitly in the land register.

Advantages and disadvantages:

The most important advantage of the letter-based debt is that, in the case of a possible assignment from the basic debt to another creditor, no land register entry has to be made. The assignment is not recognizable for third parties and there are no new land register costs. The biggest disadvantage of a mortgage with a letter is a higher cost: for the issuance of the basic debt letter, approximately 25 percent more fees are charged than in the case of an empty book-borrowing debt. If a letter of basic debt is lost, he is declared powerless by means of a so-called call-up procedure.

Order and cancellation of the land charge

If a property owner agrees to the land and the property with the land charge for the purpose of securing the loan, then a so-called land register is used. The land register is accompanied by an application for the land register. A prerequisite for an entry in the land register is the notarized or publicly certified authorization of the owner, which must be available to the Land Registry Office. To delete a basic debt you need the basic debt and a certified consent to the deletion from the creditor. The return of the basic debt letter alone does not lead to the cancellation of the basic debt.

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