Sir, in lecture 57 you had taught the concept of Second and subsequent Mortgage. Will a bank usually allow the second and subsequent mortgages to other banks? Sir my second doubt connecting to the previous question is, won't the 1st Bank hold with themselves until the loans have been repaid, the Title Deeds of the particular property of a company in which the 1st charge has been made? If so the Bank holds the Title Deeds, why would it hand over those Title Deeds to another bank in the second and subsequent mortgages? Without the Title Deeds will those subsequent banks give loans to Companies?

A bank allows the second and subsequent mortgages to other banks because in second mortgage, the lender takes a lien against your property, which is subordinate to first mortgage. This means that if borrower later default on either of mortgages and one of the lenders has to foreclose, the lender that issued first mortgage gets paid before the issuer of the second. About your second question, not in all mortgages original title deeds needs to be submitted.

Answer given by Shubhamm Sir at 26-Sep-2022 04:40 PM

Lakshmi Meenakshi ( Cochin )

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