According to Article 3 of the Measures for the Administration of Urban Real Estate Mortgage, the mortgage of the project under construction refers to the act that the land use right obtained by the mortgagor in a legal way and the investment assets of the project under construction are mortgaged to the loan bank as a loan repayment guarantee. It can be seen that it is legal to mortgage the property under construction to the bank. However, according to the relevant laws and regulations, the sale of mortgaged real estate must meet two conditions:

First, notify the mortgagee and get his consent.

The second is to tell the buyer truthfully. In practice, there are the following legal trading modes: First, developers gradually repay mortgaged houses and sell them step by step. Repay first, then sell, and ensure that the commercial housing sold is in a state of mortgage cancellation. 2. At present, the common practice in Guangzhou is that after the developer signs the real estate sales contract under the premise of fulfilling the notice, the mortgagor will raise funds by himself and return the corresponding house payment in advance, and the housing management department will handle the mortgage registration and cancellation, and then handle the registration and filing of the sales contract. Before the mortgagor obtains full property rights, most of the house payment of the buyer has not been paid, so the safety of the buyer's funds is high. 3. After the contract is signed between the buyer and the developer, the buyer, the developer and the lender (bank) agree that the buyer will deposit the house purchase money into the account designated by the bank, which is specially used to repay the loan that the real estate developer should pay to the bank. The bank issued a mortgage cancellation certificate. 4. If the buyer made a mortgage loan for part of the purchase price after purchasing the house, and the buyer transferred his house again before the loan was paid off, the original buyer jointly applied to the bank for mortgage transfer after signing a contract with the inferior buyer (this business is not provided by all banks). However, in order to sell smoothly, some developers conceal the fact that they have mortgaged their houses and sell them. This sales contract is invalid because it is a fraud not to tell the mortgage facts. According to the provisions of the second paragraph of Article 6 of the judicial interpretation, the buyer may request the return of the paid house purchase price and interest, and compensate for the losses, and require the developer to bear the compensation liability of not more than twice the paid house purchase price.