14 June 2008
can 1 property be mortgaged with more than 1 banks ? Can colletarel security be mortgaged with other bank if it was already mortgaged with one of the banks ?
19 June 2008
Legally speaking....it is possible...(Second mortgage)
However there are two practical cases..
Case: 1
When the first mortgage loan and value of the property have no huge difference....second mortgage is not possible....
because the first bank will be the first secured creditor and in the event of non payment of first loan, the first banker has the right to sell the property to recover the money....therefore the second banker has the chance of losing the security...
so no bank will prefer to create a second charge (Second mortgage) for the same security.
Case: 2
for example the first mortgage was for a loan of Rs. 5 lakhs whereas the property value is Rs. 1 crore.... here the second mortgage is possible...because the second banker is highly secured...
CAclubindia
