Key aspects of mortgage in Lithuania

One of the most important factors for the promotion of lending markets is safe credit. Credit safety can be ensured both by the financial capacity of a debtor, and by supplementary measures that guarantee the repayment of credit to a lender. Mortgage is considered as the most trusted measure to ensure the enforcement of creditor's rights. There is an easy explanation for such a statement. In the case of mortgage., the satisfaction of a creditor's claim is ensured by mortgaged immovable property, which normally has a stable residual value. A mortgage is a property right and therefore it remains valid even when the owner of the property changes, and in the case of bankruptcy, the mortgagee has a priority right as against other creditors. A mortgage is registered in a public register. The legality of a mortgage in Lithuania is ensured by dual control of competent persons authorised by the State. First, a mortgage transaction is confirmed by a notary; later, as it is being registered in the register, the legality of the mortgage is once again confirmed by a special officer - a mortgage judge. Mortgage is also attractive because of a simplified forced recovery procedure. A mortgagee does not have to bring the case before the courts to satisfy his claim. Such procedures usually take a long period of time, because the judicial process can last for several months or even years, which is then followed by procedures of compulsory enforcement. Instead, the contemporary mortgage is enforced by a creditor's claim to a mortgage judge, who effectively administers the recovery of the mortgaged property. This article discusses the main characteristics of the mortgage system and the protection of creditors' rights by way of mortgage in the Republic of Lithuania.