(De-)Constructing Mortgages: reflections on accessoriness, properties of good mortgages, and the development of new mortgage legislation for transition economies or even a future Euro-mortgage (‘Eurohypothec’).

Abstract

The chapter deals with key features of modern mortgages and provides recommendations for constructing good mortgages. Traditionally, mortgages have been closely linked to the claim they are too secure, often through a doctrine of accessoriness. This legal idea can be traced back to Roman law and has brought with it major practical problems for modern secured financing. Most legal systems have found ways to remedy the negative consequences of accessoriness, but in many cases this has led to complicated legal constructions and a lack of transparency. This chapter reviews various techniques that have been used to separate the mortgage from the secured claim. It points out which properties are necessary for good mortgages and which techniques can best achieve the goal of good mortgages. The chapter provides recommendations for mortgage law reforms, including considerations on how it is possible to structure a pan-European mortgage (Eurohypothec).