DOCUMENTATION(S) IN RESPECT OF FINANCING(S) AND/OR MORTGAGE(S)

DOCUMENTATION(S) IN RESPECT OF FINANCING(S) AND/OR MORTGAGE(S) DOCUMENTATION(S) IN RESPECT OF FINANCING(S) AND/OR MORTGAGE(S) BY Saalim Salam Ansari, Advocate, Karachi There is a system of documentation(s) existing in respect of financing(s), which starts after the grant and/or approval of the application of the customer(s) /borrower(s) by the financial institution(s), in shape of the issuance of the sanction letter/advice. Sanction Letter/Advice Sanction letter is a basic loan document, issuance of which is after the approval of finance by the financial institution, in which the nature of financing, the limit and/or scope of financing, the name of principal borrower(s), the rate of mark-up or profit and/or mode(s) of repayments (or instalments) and the securities will also be mentioned/ endorsed in the sanction advice along with period of loan. Further the securities having the details including personal guarantees of the Directors or partner(s) or sole proprietor of the principal borrower(s) to whom the loan will be sanctioned, as well as the details of mortgaged properties against whom mortgage will be created as security, execution of D.P. Notes, Hypothecation(s), Pledge(s) with details and post-dated cheques if any, etc. are supposed to be obtained as security will also be described. Any security beyond the securities mentioned in the sanction letter or advice can create doubt(s) and/or if the same is not endorsed in any subsequent sanction letter(s) or mutually agreed document(s) is not available. Documentation(s) The documents which will be required after the issuance of sanction letter, are: (i) Documentation in respect of mortgages. (ii) Agreement of Financing(s). (iii) Letter of hypothecation with details of goods to be hypothecated/stock's report. (iv) Letter of pledge with stock's details/inventory. (v) Letter of guarantee(s). (vi) Demand Promissory Note(s). (vii) Post-dated cheques, (if any), etc. (viii) Search Certificate(s). (ix) Valuation Certificate(s). (i) Documentation in respect of mortgage(s) That in pursuance of section 58 of the Transfer of Property Act, 1882 the "mortgage", "mortgagor", "mortgagee", "mortgage-money", and "mortgage-deed" are defined as, 58(a) "mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability." "The transferor is called a "mortgagor", the transferee a "mortgagee"; the principal money and interest of which payment is secured for the time being are called the "mortgage-money", and the secured for the time being are called the "mortgage-money", and the instrument (if any) by which the transfer is effected is called a "mortgage-deed". In Pakistan, there is existence of two (2) kind(s) of mortgage(s), (i) registered mortgage and/or (ii) equitable mortgage. Six (6) types of mortgages are defined and/or explained in section 58 of the Transfer of Property Act, 1882, which are: (1) Simple mortgage. [section 58(b)] (2) Mortgage by conditional sale. [section 58(c)] (3) Usufructuary mortgage. [section 58(d)]. (4) English mortgage [section 58(e)] (5) Mortgage by deposit of title-deeds. [section 58(f)] (6) Anomalous mortgage. [section 58(g)]. In the Black's Law Dictionary (7th Edition) at page(s) 1026-1027, sixty-one (61) kind(s) and/or types of mortgages are mentioned and/or defined, which have been described as: (1) Adjustable-rate mortgage, (2) All-inclusive mortgage, (3) Amortized mortgage, (4) Baloon-payment mortgage, (5) Blanket mortgage, (6) Bulk mortgage, (7) Chattel mortgage, (8) Closed-end mortgage, (9) Closed mortgage, (10) Collateral mortgage, (11) Consolidated mortgage, (12) Construction mortgage, (13) Contingent-interest mortgage, (14) Conventional mortgage, (15) Direct-reduction mortgage, (16) Dry mortgage, (17) Equitable mortgage, (18) Extended first mortgage, (19) FHA