Bridge Mortgage Definition

According to the definition of'regulated mortgage contract' in Art. 61(3)(c) of the Regulation on Structured Activities, the facility comprises a revolving mortgage and any other type of subsidy. Even though "financial adjustment" has a potentially far-reaching significance, its coverage is restricted by the concepts used in the definition of a mortgage agreement in PERG 4.4.1 G. Regardless of the way the adjustment can be made, Art. 61(3)(a) provides that it must contain a repayment commitment from the person receiving it.

perg 4.4. 1g (1) restricts the group of borrower to whom the protective measures of the Mortgage Ordinance for private persons and fiduciaries are applicable. A mortgage agreement is not a regulatory mortgage agreement if a corporation (other than a trustee) lends funds to finance the corporation's operations and the mortgage is backed by a mortgage on the corporation's ownership.

A creditor will therefore not exercise a regulatory function by concluding this agreement, nor will he exercise a regulatory function by advising, mediating or administering this agreement. If, however, the creditor grants a single entrepreneur or (in England and Wales) a private company a commercial mortgage and the mortgage is secure on the borrower's home or homes, the agreement will be a mortgage agreement.

5 A credit to a fiduciary is captured even if the fiduciary or the payee is not a person. Therefore, it is possible that a credit to a fiduciary who acts for a large corporation is a regulatory mortgage deed. It is likely that in practical terms the exemptions for credits to industrial debtors (in particular see PERG 4.4. 17 and PERG 4.4. 21) will avoid such credits being subject to regulation.

When: the credit is granted to a fiduciary; the recipient of the trusts acts for business purpose; it is likely that the fiduciary will also act for business use. Lending to a partner can be a lending to an entrepreneur if the partner is a genuine person (i.e. a physical person as distinct from a corporate person).

However, there may be cases where an agreement that was not a covered mortgage agreement at the date of conclusion is superseded by an amendment (whether the amendment is introduced by the client or by the lender) and the new agreement is considered a covered mortgage agreement.

Therefore, a single entity may have to consider this option (which may impact on agreements originally concluded before 31 October 2004 as well as on follow-up loans) when determining whether it needs an authorisation to exercise one of the regulated mortgage credit operations. 5- The most apparent example of a mortgage agreement that is subject to regulation is a mortgage to an entrepreneur that enables the entrepreneur to buy a home for himself if the mortgage is secure on that home.

There is no need for the borrowers to take possession of the real estate. It is a minimum 40% condition that the plot should be used as a home, but no condition that it is the debtor who uses it as a home. For example, a mortgage may be a regular mortgage agreement if the debtor does not own the plot on which the mortgage is secure and instead wishes to resell the plot to a third person, with the mortgage staying on the home until then.

If, however, the Mortgagor is commercially trading, the credit in (2) may be foreclosed as a credit to a commercially trading Mortgagor under the exclusion in PERG 4.4. 17 or PERG 4.4. 21. The term "as or in relation to a dwelling" in PERG 4.4. 1G (3) means that credit for the purchase of a small home with a large yard would generally be provided.

If, however, at the inception of the agreement it was planned to use the property for another purposes - for example, if it was planned that a third person would use the property - the agreement would not qualify as a mortgage agreement.

Moreover, the FCA would not consider a farm and farm house acquisition credit as a subsidised mortgage agreement (with the farm and the yard accounting for less than 40% of the total surface area of the land) as it does not appear that the property could be considered duly used as 'related to' the farm.

There is no indication in the definition of the mortgage agreement for which the mortgage is granted. Additionally to the definition of home ownership lending to an individual, the definition is broad enough to include other types of lending securitized to real estate, such as debt consolidation lending, or to allow the debtor to buy other goods and utilities.

Definition of the mortgage agreement also encompasses a wide range of products. In addition to the standard mortgage for the acquisition of real estate, the definition also encompasses other kinds of collateralised lending, such as the collateralised current account line of credit, a bridge line of credit 5,4 (although the bridge lines of credits described in PERG 4.4. 27 GL are not regulatory mortgage agreements)4 a collateralised bank account line of credit and regulatory lifelong mortgage agreements under which the debtor (usually an elderly person) borrows a mortgage where principal repayments (and in some cases interest) are made only after the sale of the asset.

There is a broad significance to the definition of a mortgage agreement in mortgage regulation document no. V. Mortgages has a broad significance for the definition of a mortgage agreement. These include: a juridical mortgage; reasonable collateral; collateral normally used in another EEA State for credit backed by home ownership. 8 It is possible that more than one mortgage agreement is backed by the same fee.

The definition of a mortgage loan is not applicable to a loan if, at the inception of the loan, the loan holder fulfils the following conditions: the loan holder enters into or exercises all or most of the loan for the purpose of a transaction executed by the loan holder.

5 If less than 40% of the property collateralised by the mortgage is used or to be used as or in relation to a home, the exemption from granting credit to business customers described in PERG 4.4. 17G is not relevant as the credit is outside PERG 4.4. 1G and therefore cannot be a regulatory mortgage agreement.

Expulsion becomes applicable (if all requirements in PERG 4.4. 17S are fulfilled ) if at least 40% of the mortgage backed real estate is used as or in relation to an apartment by: the Mortgagor and another person if the rate used by the Mortgagor as home ownership is less than 40%.

Therefore, the foreclosure would for example include a credit facility guaranteed for housing where a professional debtor will not take possession of the real estate but will resell it to a third person. 5 There is also an exemption for exposures to industrial customers collateralised by a second or succeeding collateral.

The definition of a mortgage loan is not applicable to a loan if, at the inception of the loan, the loan holder fulfils the following conditions: the loan holder enters into or exercises all or most of the loan for the purpose of a transaction executed by the loan holder.

There is no waiver from the 25,000 limit in PERG 4.4. 21G (2) for an object that is included in the overall fee for credits. Setting a deadline for the interest to be paid if the debtor gets into difficulties does not influence the amount to be calculated, as the definition refers to the date of conclusion of the agreement.

If, however, the exposure contains a brokerage charge, for example, this charge may be waived when calculating the price of the underlying asset. 5 The exclusions in PERG 4.4. 24 Clause 2 shall only apply if the loans meet the following conditions: Any advertisement for the agreement is fairly, clearly and not deceptively. An agreement is exempt from the definition of a mortgage agreement if, at the date of its conclusion, it satisfies the following conditions: the number of repayments to be made by the debtor under the agreement does not exceed four.

An agreement is exempted from the definition of a mortgage agreement if, at the moment of its conclusion, it fulfils the following conditions: it provides for loans to be provided by a "housing administration" within the sense of Art. 60E of the Regulation on Structured Activities. This definition in Art. 60E also covers residential property companies incorporated under the applicable law on residential property (see PERG 2.7. 19FAG); if concluded on or after 21 March 2016, it is a limited government grant within the sense of PERG 4.13.7G.

5 The two exemptions for credits to industrial creditors ( PERG 4.4. 17 A and PERG 4.4. 21 A) are dependent on the fact that the creditor is not a user. Declaration that the arrangement is concluded or is to be exercised in whole or in part by the Mortgagor for the purpose of a transaction executed by the Mortgagor; a declaration that the Mortgagor is aware that if the Mortgagor has any doubt as to the effects of the arrangement, which is not governed by law, the Mortgagor should seek the assistance of a third party; the Arrangement shall be deemed to have been concluded in whole or in part by the Mortgagor for the purpose referred to in paragraph 2(a).

5 However, the assumption in PERG 4.4. 29 Clause 29 does not hold true if, at the time the contract was concluded: a party who was acting in the name of the creditor (or, if there is more than one creditor, one of the creditors) in relation to the conclusion of the contract; knows or has reason to believe that the debtor is not concluding the contract entirely or predominantly for the purpose of a transaction executed or to be executed by the debtor.