An understanding of mortgage law is important before entering into any contract.
One of the problems with the law is that people don’t understand it.
Even lawyers, who have actually studied and practiced it for years, argue with each other about what the law means.
So it isn’t surprising that many people enter into a contract like a mortgage agreement without understanding that the provisions of that contract have limits fixed by law.
A mortgage is one of the kinds of contracts specially regulated by Philippine law. Because it is regulated, the signatories to a mortgage cannot just decide among themselves what their rights and obligations are in their mortgage contract. The terms of a mortgage contract should not violate the regulations set by the Civil Code of the Philippines or else those terms will be invalid.
It’s the sort of thing that gives rise to nasty and protracted litigation. This is one of the reasons why people entering into loan agreements, whether as debtor or creditor, should have a basic understanding of the law on mortgage contracts.
You’ll have problems if your mortgage contract is not valid.
What follows is not meant to be an exhaustive discussion of all aspects of the mortgage law, but a brief primer to enable anyone to understand its basic aspects. A simple mortgage contract is also included, and the comments are open for any questions.
