Mortgage as a legal instrument for enforcement of the contract of sale

Mortgage is a real means of securing the contract, the contracting parties, in many cases agree to finalize their agreement on a certain item by concluding a written contact, but in some cases the contracting parties can also be ensured in various ways to adhere to the rights and obligations arising from their contract. The creditor on the one hand as the pledgee and the debtor on the other hand as the pledgor are those who enter into a contract by which they create their rights and obligations arising from the contract which must be drafted in support of the provisions of the Law on Obligational Relationships. At the time of entering into the contract they can also enter into a mortgage contract as a real means of securing the contract, where the creditor is assured that if the debtor does not meet the main contractual requirement, then by mortgage as a real means of securing the contract he will realize the main requirement of the contract, i.e. through the mortgage as a real means of securing the contract the pledgee creditor manages to fulfill the main requirement of the contract which the debtor has not been able to meet by the pledgor.

Housing equity withdrawal for development of assisted-living facilities

Purpose The purpose of this study is to develop new type of reverse mortgage contract. How to provide adequate services and housing for an increasing number of people that are dependent on the help of others is a crucial question in the European Union (EU). The housing stock in Europe is not fit to support a shift from institutional care to the home-based independent living. Some 90% of houses in the UK and 70%–80% in Germany are not adequately built, as they contain accessibility barriers for people with emerging functional impairments. The available reverse mortgage contracts do not allow for relocation to their own adapted facilities. How to finance the adaptation from housing equity is discussed. Design/methodology/approach The authors have extended the existing loan reverse mortgage model. Actuarial methods based on the equivalence of the actuarial present values and the multiple decrement approach are used to evaluate premiums for flexible longevity and lifetime long-term care (LTC) insurance for financing adequate facilities. Findings The adequate, age-friendly housing provision that is appropriate to support the independence and autonomy of seniors with declining functional capacities can lower the cost of health care and improve the well-being of older adults. For financing the development of this kind of facilities for seniors, the authors developed the reverse mortgage scheme with embedded longevity and LTC insurance as a possible financial instrument for better LTC services and housing with care in assisted-living facilities. This kind of facilities should be available for the rapid growth of older cohorts. Research limitations/implications The numerical example is based on rather crude numbers, because of lack of data, as the developed reverse mortgage product with LTC insurance is a novelty. Intensity of care and probabilities of care in certain category of care will change after the introduction of this product. Practical implications The model results indicate that it is possible to successfully tie an insurance product to the insured and not to the object. Social implications The introduction of this insurance option will allow many older adult with low pension benefits and a substantial home equity to safely opt for a reverse mortgage and benefit from better social care. Originality/value While currently available reverse mortgage contracts lapse when the homeowner moves to assisted-living facilities in any EU Member State, in the paper a new method is developed where multiple adjustments of housing to the functional capacities with relocation is possible, under the same insurance and reverse mortgage contract. The case of Slovenia is presented as a numerical example. These insurance products, as a novelty, are portable, so the homeowner can move in own specialised housing unit in assisted-living facilities and keep the existing reverse mortgage contract with no additional costs, which is not possible in the current insurance products. With some small modifications, the method is useful for any EU Member State.

Housing Market Bubbles and Mortgage Contract Design: Implications for Mortgage Lenders and Households

This paper explores the implications of a housing market bubble for three critical elements of mortgage contract design: difference between term to maturity and amortization period; prepayment options; and, lender recourse in the event of default. Using an extension of classical immunization theory, this paper provides equilibrium conditions demonstrating the risk reduction benefits of shorter term to contract maturity at origination for lenders of long amortization mortgage contracts. In addition, the risks of underpricing prepayment and no recourse default options in the mortgage contract when compared with full recourse mortgage contracts having yield maintenance prepayment penalties are explored by contrasting the ability of US and Canadian mortgage funding systems to withstand a housing market bubble collapse that might occur.

Introduction

What is a “dead pledge”? Despite its gothic connotations, it actually names something that is probably quite familiar to many readers: a mortgage contract. The name for a contract on a real estate loan comes from the French mort gage. From this surprising etymology, we might exhume any number of meaningful lessons: about the terrifying nature of debt; the strange ontology of property; the uncanniness of ownership; the implicit threat at the heart of the credit contract. ...