Simple Mortgage Deed

This Packet Includes:

1. Description and Instructions

2. Simple Mortgage Deed

Description and Instructions

Simple Mortgage Deed

A mortgage deed is a document that gives a lender (also known as a mortgagee) the legal right and interest in a property. A mortgage allows a borrower (also known as a mortgagor) to pledge his home or any such property as security for a loan; the mortgage deed represents the lender's ownership in the property.

A simple mortgage gives two-fold rights to a mortgagee: i) a covenant on the part of the mortgagor to pay the debt; and ii) the right granted to the mortgagee to realise his dues from and out of the property mortgaged to him. These rights also gives the mortgagee the power to proceed in the Court should the mortgagor be in breach of any of the two rights granted to the mortgagee. In a simple mortgage, the security is two-fold: one is the property and the other is the personal obligation. Since a simple mortgage deed provides for a two-fold security, the remedy and cause of action is two-fold. The mortgagee can sue for both the recovery of the mortgage and also from the sale of the mortgaged property or he could file two separate actions for the enforcement of the two independent rights. If the mortgagor fails to repay the loan, the mortgagee has the right to sell the property and recover the loan from the sale amount.

A simple mortgage deed should carefully lay down the terms of payments of the installments, obligations of the mortgagor, availability of any grace period and what recourse or relief the mortgagee gets in the event of any breach. You should read the mortgage deed, offer letter and mortgage conditions very carefully.

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