Mortgage of assets: What is Asset Mortgage? How are Mortgage Assets Regulated?
What is Asset Mortgage? How is Mortgaged Asset Regulated? What is the Effect of Asset Mortgage? When Does Asset Mortgage Terminate? Please Assist.
What is Asset Mortgage?An asset mortgage is a legal arrangement where a borrower pledges their assets as security for a loan. If the borrower defaults, the lender has the right to seize the mortgaged asset.How is Mortgaged Asset Regulated?
The regulation of mortgaged assets is detailed in specific legal documents and regulations issued by the authorities. These laws cover the types of assets that can be mortgaged, the procedure for creating a mortgage, and the rights and obligations of both the borrower and the lender.What is the Effect of Asset Mortgage?
The effect of an asset mortgage is to provide the lender with a security interest in the borrower’s asset. This means the lender can take possession of the asset if the borrower fails to meet their loan obligations, providing a form of protection for the lender.When Does Asset Mortgage Terminate?
An asset mortgage terminates in several circumstances, such as:- The full repayment of the loan.- Agreement between the parties to release the mortgage.- The sale or transfer of the mortgaged asset, with the consent of the lender.- Other legal grounds as specified by relevant laws.If these aspects are not clear, please let us know to provide further assistance.
What is Asset Mortgage?
According to the current regulations in Article 317 of the 2015 Civil Code, asset mortgage is defined as follows:
- Asset mortgage is the act wherein one party (hereinafter referred to as the mortgagor) uses an asset owned by him/her to secure the performance of an obligation without transferring the asset to the other party (hereinafter referred to as the mortgagee).
- The mortgaged asset is retained by the mortgagor. The parties may agree to have a third party hold the mortgaged asset.
How are Mortgaged Assets Regulated?
Article 318 also stipulates about mortgaged assets as follows:
- In case the whole immovable property or movable property with accessories is mortgaged, the accessories of such immovable property or movable property are also considered mortgaged assets, unless otherwise agreed.
- In case a part of the immovable property or movable property with accessories is mortgaged, the accessories attached to such property are also considered mortgaged assets, unless otherwise agreed.
- In case the right to use land is mortgaged and the property attached to the land belongs to the mortgagor, such property attached to the land is also considered mortgaged assets, unless otherwise agreed.
- In case the mortgaged asset is insured, the mortgagee must notify the insurance organization about the insured asset being mortgaged. The insurance organization shall directly pay the insurance compensation to the mortgagee when the insured event occurs.
In case the mortgagee does not notify the insurance organization about the insured asset being mortgaged, the insurance organization shall pay the insurance compensation according to the insurance contract and the mortgagor is obligated to pay the mortgagee.
What is the Validity of Asset Mortgage?
- The asset mortgage contract takes effect from the time of the conclusion, unless otherwise agreed or provided by law.
- The mortgage of assets takes effect against third parties from the time of registration.
Under What Circumstances Does Asset Mortgage Terminate?
Asset mortgage terminates in the following cases:
- The obligation secured by the mortgage is terminated.
- The mortgage of the asset is canceled or replaced by another security measure.
- The mortgaged asset has been handled.
- As agreed by the parties.
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