How do you check if a Loan is taken against Property? With what bank?

There are few ways to find out if a property has mortgage and with what bank. Before we answer to your question, let’s understand the types of property mortgage, as this will give you holistic answer to question

Property mortgage are two types, they are:

1. Registered Mortgage
2. Equitable Mortgage

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1. Registered Mortgage: is the mortgage registered in sub-registrar office or with any government agency. Registered mortgage information is recorded, stored and publicly available

For example: In India, registered mortgage information is recorded and stored by Stamps & registration department of respective state

Whereas we can extract the encumbrance certificate in public domain and find the information about mortgage and with what bank

Most of the public sector bank in India, follows the model of Registered mortgage because banks have legal stand if borrowers default the payment

Once the loan is repaid, borrower can register reconveyance deed to remove the mortgage lien registered in sub-registrar office or with government agency.

2. Equitable Mortgage: is a process where a borrower deposit their property’s title documents with the lender as security for a loan until it is repaid

Most of the private lenders follow the model of equitable mortgage. Equitable mortgage information is not registered with any government agency and not publicly available.

Once the loan is repaid, lenders issue No Objection Certificate (NOC) and return the property’s title documents to borrowers.

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Now comes to your question, Three prominent ways to find if property has mortgage and with what bank:

1. Extract the Encumbrance certificate (EC)
2. Verify the original title documents
3. CERSAI

For example: I want to buy a resale property in Bangalore. before I proceed with purchase, I need to know if seller has any loan again the schedule property so first we extracted EC on Kaveri Online Services

Based on the seller name, we extracted the below EC:

• If you refer to above EC, serial No. 2, Dated 07–12–2018, seller had mortgage of Rs.39,50,000 with The Federal Bank Ltd again the property (we highlighted in black in above image)
• If you refer to serial No. 1, Dated 22–08–2023, the seller repaid the loan of Rs.39,50,000 and registered the reconveyance deed, it means that mortgage lien register against the property has been remove and property is free any mortgage encumbrance (we highlighted in green mark in above image)
• Apart from above EC, we downloaded the Reconveyance deed on Kaveri Online Services based on the registration number mentioned in serial No. 1 & column No. 9, we circled in above image for your information. We did this to strengthen our verification process

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If we could not find the mortgage information on EC, we should demand the original title document from seller.

Following are the few important title documents:

• Sale Deed
• Parent deed
• Tax receipt
• Khata

Most of the sellers readily share photocopy of title document but reluctant to share original title document to avoid misuse of documents. In such situation, we should verify original title documents in presence of seller and return it back immediately.

If seller have original title document, there may not be mortgage against the property. If seller don’t have original title document or refuse to share the original title document, there might be mortgage against the property.

If seller had/have equitable mortgage, the buyer should verify “No Objection Certificate” issued by lender.

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CERSAI is another way to find mortgage information. The abbreviation of CERSAI is Central Registry of Securitisation Asset Reconstruction and Security Interest of India

CERSAI maintains a record of property and their mortgage information. We can log into CERSAI website and access the mortgage information by searching flat number, apartment name and address. The fee of Rs.12 is applicable to search the information on CERSAI website

• Here is the link to CERSAI website CERSAI
• Click on Public search and select Immovable in Asset Category
• Enter the property number, building, address and click on Submit. The page directs to payment
• After the payment, we can find the mortgage information on the screen. The information includes the mortgage amount and with what bank

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We provide assistance to extract encumbrance certificate. To opt for our service, please WhatsApp to + 9 1 - 9 7 4 2 4 7 9 0 2 0.

Thank you for reading…