Mortgage Subrogation and Credit Redemption
Bank agreeing to finance the operation systematically requires guarantees
As part of a consolidation of real estate credit, the bank agreeing to finance the operation systematically requires guarantees. In general a mortgage guarantee, which requires a mortgage subrogation. Here are some details of this operation.
Mortgage Subrogation: What is it?
By definition, subrogation is a means of transferring receivables and the guarantees that accompany it. The principle is simple, the subrogeant, that is to say, the holder of the receivables transfer his outstandings and their guarantees or sureties to the beneficiary of subrogation, called subrogataire. In other words, this banking and legal transaction consists in transferring one or more mortgages and guarantees that have guaranteed their accessions, in this case the mortgage guarantee, from one credit institution to another or from one person to another. . In addition, there are two types of conventional and legal subrogations, subrogation by the debtor and subrogation by the creditor.
Subrogation granted by the debtor
Governed by Article 1250 ° 2 of the Civil Code, this form of subrogation is that which concerns the consolidation of mortgage loans. That is, when a borrower decides to prepay their current home loan (s) by taking out another low monthly mortgage. Once the credit institution accepts the prepayment, it will no longer be part of the transaction. However, he can claim prepayment benefits. According to the law, for subrogation to take place, it must be performed in front of a notary, the presence and the agreement of the initial lender are not necessary. In addition, the new loan agreement, the reimbursement receipt and the amortization schedule (issued by the former lender) must be submitted. On the refund receipt, it should be mentioned that the prepayment was made through the new credit and the credit agreement, it should also be mentioned that the loan was granted to repay the existing credits.
Subrogation granted by the lender
This form of subrogation is governed by Article 1250 ° 1 of the Civil Code, it is for a credit institution to agree to be paid by another than the original borrower. In fact, repayment by another debtor does not in itself entail subrogation. According to the legislation in force, this must be done through a notary. The written contract must include the signature of the new and the old borrower and, in the best case, that of the creditor. In addition, the contract of subrogation must occur at the same time as the beginning of repayments of the new borrower.
- Mortgage State and Repurchase of Credit
- The raised hand of mortgage and the repurchase of credit