Understanding Mortgage Priority: Exploring First-Degree Mortgage Regulations in Different Countries

In other words, a mortgage of this type enables the entity that granted it to perform it at all. If there is a delay in payment and the debtor has others in his name, the person who granted them has priority in the collection. In the event of a seizure of the house, this is done in favor of this bank.

The principle of first-degree mortgage priority

In many countries, a priority principle applies to collection. This is reflected in their respective civil codes. If the debtor does not pay in this way, preference is usually given to those mortgage loans that were registered first. This is important because one of the most important forms of confiscation is housing repossession.

However, a conflict may arise if there is a voluntary agreement between the parties to set a different payment order. This creates a legal problem in which either the will of the parties or the rule prevails. In most cases, the law has been adapted to these exceptional situations and the individual agreement applies.

Some registration considerations

We must clarify that there are some differences between the laws of each country. However, there are certain basic principles that they agree on. One is the date when the loan is to be considered registered and this is when the agency issues the certificate. That is, the moment when the registration is confirmed.

Some believe that it is the date of incorporation that should be taken into account. Especially if the deadlines set by the various legislations have been respected. Still, it’s best to refer to the registry. Of course we are dealing with the (statutory) automatic application of orders of priority, since the parties decide whether this is voluntary.

Mortgage regulations in some countries

It would be practically impossible to describe in detail all existing mortgage regulations, but in closing today we would like to mention a few.

• In Spain, LAW 41/2007 of December 7th, amended Law 2/1981 of March 25th. From this, the New Mortgage Law was published in 2019 in accordance with the guidelines of the European Union. From now on, some specific consumer protection regulations have been created.
• In Colombia, the most important regulation is Law 546 of 2000 or the Housing Act. It sets out the terms, requirements and procedures for mortgage loans. On the other hand, a number of questions arise regarding the protection of the debtor and non-seizure.
• In addition, civil law laws in most countries set the ground rules. In this way, they usually contain the main regulations that form the starting point of the specific laws. Usually these (among other things) develop priority in a first-degree mortgage.