The Mortgage, art. 2808 of the Civil Code

The right to expropriate the property to satisfy the creditor's interest.

In this post we will proceed to the analysis of the mortgage institution, focusing on its reference legislation and on the effects that derive from it between debtor and creditor.

The mortgage is regulated pursuant to art. 2808 of the civil code. The ratio legis of the aforementioned provision defines the mortgage as a real right of guarantee, aimed at protecting the creditor's interest. The parties involved are two: the creditor and the debtor.

But what is a mortgage? What is its purpose? How many types of mortgages are there? How do you cancel it? What happens if you buy your first home with a bank loan?

If you are interested and want to know the answers to the previous questions, you just have to continue reading this post.

What is a mortgage?

As anticipated, the mortgage represents a real right of guarantee that concerns real estate. The property that is the object of the guarantee remains in the possession of the debtor.

To better understand the institution, we report a simple example below: if a person intends to take out a loan, the person who grants the credit, i.e. the creditor, has the right to protect himself from any defaulting behavior of the debtor, i.e. the person who requested the loan of a certain sum of money. The protection and guarantee provided for the creditor is called mortgage .

Through the mortgage, the creditor can protect himself in the event that the debtor fails to fulfill his economic obligations. Therefore, the creditor can satisfy his interest by "attacking" a certain asset of the debtor.

Consequently, the mortgage grants the creditor the right to expropriate the property and to satisfy his creditor's interest on it by exercising a right of pre-emption on the price obtained from the sale.

Article 2808 of the Civil Code regulates the institution of the mortgage and states: “ The mortgage gives the creditor the right to expropriate, even against the third party purchaser, the assets pledged as a guarantee for his credit and to be satisfied with preference on the price obtained from the expropriation. The mortgage may have as its object assets of the debtor or of a third party and is established by registration in the real estate registers. The mortgage is legal, judicial or voluntary”.

What happens if I take out a bank loan for buy a house ?

In the case of a mortgage loan for the purchase of a new home, the guarantee for the payment of the installments will be guaranteed by a mortgage on the property, usually on the same house that the debtor intends to purchase. For this case, the mortgage registration It is used to protect the creditor, therefore, the bank, if the debtor is insolvent in paying the mortgage installments. In the event of default by the debtor, the bank will be able to proceed, thus, to expropriate the property given as collateral.

In the case of mortgage loan However, there are also advantages for the debtor and/or borrower. The latter will continue to have the property that is the subject of the guarantee. Therefore, in the case of the purchase of a property to use it as a family home, the buyer will still be able to use it as a normal residence.

The mortgage will have a duration of 20 years, which means that after this period it will be renewed and for mortgages with a duration greater than this last period, a usual renewal will be carried out. When the mortgage is completely paid off, the mortgage will be cancelled from the public registers. The relative cancellation will be paid by the same bank without additional costs for the debtor.

It must also be remembered that the right of succession is particularly relevant, that is, the right to subject the asset to forced execution even if it becomes the property of a third party.

What is the difference between a pledge and a mortgage?

Even the pledge is a real right of guarantee and the two parties involved are: a creditor and a debtor. The purpose is the same: the debtor grants an asset for the benefit of the creditor and to protect the latter's interest.

A mortgage applies to all real estate while a pledge applies to movable property.

To understand the difference between a pledge and a mortgage we rely on an example: the mortgage could be established on a house (real estate) and the pledge could refer to a precious ring, such as a movable property.

The three types of mortgage

The last paragraph of art. 2808 of the civil code distinguishes three types of mortgage: legal, judicial and voluntary. This last type of mortgage is certainly the most used and as the term "voluntary" itself suggests, it is voluntarily registered by the owner of the property as a guarantee for his debt. As happens, for example, in the case of granting a bank loan.

The judicial mortgage, on the other hand, is determined by the judge himself, and is subordinated to a request by the unsatisfied creditor.

The legal mortgage, (if you want to learn more about this topic, also read Legal mortgage: registration is null in the absence of notification of the tax bill) Instead, it is a form of guarantee that the seller of a property can enforce on the property being sold, in order to protect himself in the event of non-compliance with the contract by the debtor. This type of mortgage is among the least used cases.

How to cancel the mortgage?

The mortgage can last for a maximum of 20 years and will be automatically cancelled and, if necessary, renewed for another 20 years and so on, as for example in the case of a longer term mortgage, without the intervention of a notary or costs on the part of the debtor.

Practical advice

With a mortgage search (click here and request your mortgage certificate) it is possible to know the list of any mortgages established on the property you are interested in. For this reason it is very important, before purchasing a house, to verify through a specific appraisal whether the property is burdened by a mortgage, thus knowing all the liens pending on the property.

In the case of registered movable assets, a copy will certainly also be useful. view at the pra on the license plate (request the Pra license plate check here) of the debtor's vehicle.

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