2. Paragraph 1 of Article 33 of the Guarantee Law stipulates: "Mortgage as mentioned in this Law means that the debtor or a third party does not transfer the possession of the property listed in Article 34 of this Law and takes the property as a guarantee for the creditor's rights. When the debtor fails to perform the debt, the creditor has the right to discount it in accordance with the provisions of this law or give priority to compensation with the price of auction or sale of the property. " Accordingly, the loan contract can stipulate that if the repayment is overdue, the debtor's property can be auctioned or sold off.
3. Article 40 of the Guarantee Law stipulates: "At the same time when the mortgage is established, the mortgagee and the mortgagor shall not stipulate in the contract that the ownership of the mortgaged property shall be transferred to the creditor when the mortgagee is not paid off at the expiration of the debt performance period." Article 186 of the Property Law stipulates: "Before the expiration of the debt performance period, the mortgagee shall not agree with the mortgagor that the mortgaged property shall be owned by the creditor when the debtor fails to perform the due debt." It can be seen that the loan contract cannot stipulate that the lender directly takes over the debtor's property when the repayment is overdue. If there is such an agreement, then this agreement is invalid. This kind of mortgage is a current mortgage, and the current mortgage is invalid.