Bonds issued by mortgage banks to raise funds to make mortgage loans are referred to as mortgage bonds.
Why get mortgage bonds?
Mortgage Lien Certificates (MLCs) are bonds whose nominal value, including interest, is fully covered by claims on mortgage loans secured by a pledge of the objectively determined value of the property.
Did you know that a pledge is a bank’s lien on a property owned by the customer, which is registered in the Land Registry? It attaches to real estate and can be enforced against all future owners.
The reasons for the acquisition of pledge certificates include:
- Collateral-HZLs are backed by claims on mortgage loans insured through a lien on actually existing real estate.
- Yield-Interest is generally fixed and net, not subject to income tax.
- Liquidity-The owner can sell them at any time.
What is a mortgage deed for?
A lien is a so-called easement over another’s property that serves to secure a claim in the event that the debt corresponding to it is not fulfilled in time and properly.