Mortgage bill: a valid alternative to the mortgage?
Mortgage bill: what it is and how it works
Given that the bill of exchange is a credit guarantee with a high guarantee, one might wonder why there should be a need to “incorporate” another guarantee with great strength such as a mortgage, giving rise to the so-called mortgage bill. In practice, this constitutes a very particular situation, which overcomes some limitations that are intrinsic in the mortgage guarantee itself (like the one that assists mortgages).
Why choose it?
A peculiarity of this type of bill is intrinsic in its operation, which allows the transfer and circulation of the guarantee given by the mortgage, incorporated in the bill of exchange, with the possession of the credit title itself, without there is the need to provide for subsequent transcripts to be made in the property registers (see also Mortgage financing).
In fact, it is only at the time of issue that the mortgage must be recorded on the bill of exchange and in the register, but subsequently, no further notes will be made, and with the endorsements, the guarantee will also be transferred to the property indicated for the mortgage registration.
Therefore if the debtor does not pay, it is the one who has the bill in hand to have priority for the attachment, so as to satisfy his own credit (see also the attachment of salary assignment).
Formalities and prescription
First and foremost, it must be immediately recognizable that they are mortgage bills. Precisely for this reason, it is necessary to use the appropriate model (also available in the form of facsimile). The limitation period is short, set at 3 years. It is then susceptible, as already mentioned, in the endorsement formula, and may also be accompanied by the introduction of the signature of the author.
Considering the formalities to be carried out (primarily to provide for the registration of a mortgage), it is quite clear that the cost is not modest. In particular, in addition to the stamp of bills of exchange, which is equal to 12 per thousand (to be applied to the amount shown on the bill of exchange), it is necessary to add the mortgage registration tax and the notary’s fee which must be consulted to carry out the various formalities.
In the panorama of bills, it is certainly not the most economical form. It can be used in the event of the purchase of a property (with an extension made by issuing bills of exchange), as the purchaser cannot access other forms of financing. If chosen with the intention of finding a less expensive type of mortgage instead, the choice is absolutely wrong.