Borrowers mortgage agreements often wonder about the consequences of the waiver of the obligation for monthly payments. Note that the credit institution has few effective levers of influence on the payer. This is due to the legal nature of the mortgage contract, which represents the agreement on mortgage of immovable property. Given the above, the property is security for the performance by the borrower of the obligation to make periodic payments, total repayment of debt within the deadline. In case of nonperformance, improper performance of this obligation, the Bank can foreclose on the property acquired and to cover their costs with the proceeds.

Consequences of improper performance of obligations under the mortgage agreement

If the borrower on the mortgage agreement allows only little or not very often delay, the most severe consequence will be the need for the payment of penalties to the Bank. Practice shows that the credit institution loyal to such issues as the contractual penalty cover all losses that may arise as a result of the delay. Foreclosure on the collateral is an extreme measure that is used for chronic or persistent non-payment, and in the absence of any other ways to settle debt of the borrower. Civil law allows you to foreclose on the mortgaged property subject to the conditions on a three-month pass compulsory payments and stock of debt, which is at least five percent of the total amount of the obligation.

The procedure for foreclosure on pledged property

In the presence of the above-described sufficient grounds for repossession of the property is a credit institution applies to the court with the relevant requirement. To collect the debt at the expense of residential premises is possible only by court decision, so this appeal is mandatory. After satisfaction of the declared requirements is the implementation of the mortgage. The proceeds from the sale amount, the lender takes back the debt, and if there is any remainder – returns it to the former owner of the property. If the proceeds are not enough to settle the entire debt, the law allows you to foreclose on other property of the debtor.