Aug 18th 2014
One can raise money by depositing the title deed of an immovable property with a finance company. This is known as equitable mortgage or mortgage through deposit of title deed.
Title deeds or ownership documents of the property are deposited with the mortgagee or its agents to provide a collateral security for the loan.
It is not always necessary to register equitable mortgage. However, with mounting housing loan frauds, many states have made registration compulsory.
Since an equitable mortgage is often not registered, there is no mention of it in the land records, and the property can be sold by the owner even if the loan has not been paid.
Some state governments have made it mandatory to register equitable mortgages by filing a notice of intimation of an equitable mortgage within a prescribed period.