Mortgage loan means that the borrower borrows money from the bank with his own property as a guarantee. If the lender is unable to repay the debt, the bank has the right to auction the house through legal procedures to pay off the debt. In this process, the mortgagor has certain rights to pay off the arrears and get back the ownership of the house before the bank auction. If the arrears are still unpaid, the bank can auction the house according to legal procedures and pay off the arrears with the proceeds from the auction. The effectiveness of mortgage comes from the provisions of the Guarantee Law and the Contract Law. A mortgage contract shall follow the principles of voluntariness, equality, fairness and good faith. According to the contract, the mortgagor needs to repay the loan on time, otherwise the bank can pay off the debt by auction or other means according to the agreement. The mortgagor can also take the initiative to negotiate with the bank to extend the loan term or change the repayment method, so as to avoid the loss of property due to the inability to repay the arrears. It should be noted that in the process of mortgage loan, the bank will evaluate the house to determine the loan amount and the reserve price at auction. If the market value of the house is lower than the loan amount, the mortgagor may have to bear the difference. Therefore, when choosing a mortgage loan, the mortgagor needs to carefully evaluate his repayment ability and the value of the house to avoid property losses.
If the bank has problems in the auction, what responsibility should the mortgagor bear? If the bank's illegal operation in the auction process causes the mortgagor to suffer losses, the mortgagor may claim compensation from the bank. If the bank does not agree to the compensation, the mortgagor can solve it through legal channels.
Housing mortgage loan is valid in law, but the mortgagor must repay the loan on time, otherwise the bank can auction the house according to legal procedures to pay off the debt. Mortgagers need to carefully evaluate their repayment ability and the value of the house when choosing mortgage loans to avoid property losses.
Legal basis:
Article 400th of the Civil Code of People's Republic of China (PRC) establishes a mortgage, and the parties shall conclude a mortgage contract in writing. A mortgage contract generally includes the following clauses:
(1) The type and amount of secured creditor's rights;
(2) The time limit for the debtor to perform the debt;
(3) The name and quantity of the mortgaged property;
(4) the scope of the guarantee.