Factors Affecting the Implementation of Mortgage Contracts Between Commercial Banks and Customers

Termination of mortgage contract

Termination of a property mortgage contract complies with the provisions of the Civil Code on cases of termination of civil obligations in general and termination of mortgage in particular.

Firstly , the cases of termination of contractual relations according to Article 374 of the Civil Code on termination of civil obligations include: Termination due to completion of the contract; Termination by agreement of the parties; Termination according to the provisions of law (for example, for bankruptcy or contract limitations for each specific type of contract); Termination due to the contract no longer having an object and the parties have agreed to replace it with another object or compensate for damages; Termination due to inability to perform the contract; The individual entering into the contract dies, the legal entity or other subject terminates and the contract must be performed by that individual, legal entity or subject; Termination due to breach of contract . More specifically, the termination of a mortgage occurs in the cases specified in Article 327 of the 2015 Civil Code: The obligation secured by the mortgage terminates; The mortgage of property is cancelled or replaced by another security measure; The mortgaged property has been processed; According to the agreement of the parties.

1.3. Factors affecting the implementation of mortgage contracts between commercial banks and customers

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1.3.1. Objective factors

Economic environment: The State's economic policies and guidelines directly affect the scale and quality of the Bank's credit as well as the handling of bad debts. The State's policy of encouraging the development of business sectors has created a large demand for capital for the Bank, helping the Bank expand its lending to the economy. The State's regulations and mechanisms for each sector can create opportunities to improve the operational efficiency of enterprises, but can also cause difficulties, thereby affecting the business results of enterprises and the ability to repay loans to the Bank. The Party and State's policies and guidelines in each period can greatly affect the Bank's foreclosure of mortgaged assets and debt collection.

Legal environment: A stable legal environment will be much more convenient for the business of the Bank as well as of customers and vice versa, legal documents and regulations on secured loans, registration of secured transactions, handling of collateral... still have many shortcomings, lack of uniformity, causing difficulties for the Bank when approving loans and handling collateral to recover debts.

Political environment: A stable political environment will help businesses invest boldly, improve operational efficiency, and repay debts to the Bank on time. In addition, a stable political environment will facilitate the issuance of highly synchronous legal documents, helping the Bank resolve difficulties in lending and handling of bad debts, and at the same time, increase customer responsibility.

1.3.2. Subjective factors

Quality of appraisal staff: A team of competent, responsible and highly specialized appraisal staff will contribute to improving the efficiency of appraisal work, helping the Bank avoid possible risks. In addition, a team of staff with in-depth expertise in each field and the ability to analyze market fluctuations will help to properly value financial assets, reducing losses for the Bank when having to auction financial assets to recover debts.

Management, organization and control of banking activities: Assets formed from loan capital are not real assets of the enterprise, but are formed from the bank's loan capital. Therefore, the obligation to manage assets and manage the bank's loan amount are linked together. That requires the management, organization and control of banking activities to be performed well. This work is carried out strictly, in a systematic and regular manner, which will encourage healthy appraisal activities, otherwise it will create loopholes for some credit officers, causing serious consequences for the bank. Good management, organization and control of activities will help the bank grasp information about loans and the status of financial assets to avoid customers using loans for the wrong purposes and defrauding the bank.

Customer capacity: Customer capacity is of particular importance to the Bank in making lending decisions and debt collection. When making loans, Banks want to recover the loan and interest after a certain period of time. However, if the customer's capacity is poor, the business plan is not feasible, weaknesses in management lead to business losses, failure to repay loans to the Bank, seriously affecting the Bank's credit quality.

Customer ethics: The customer's attitude towards the willingness to repay the loan to the Bank is extremely important. If the customer respects and cooperates with the Bank, provides clear, healthy and honest financial reports when applying for credit, it will help the Bank conduct appraisal easily and effectively, thus being able to meet the capital needs of the customer. When dealing with TSTC, the customer is responsible for coordinating well with the Bank to come up with handling measures in accordance with the regulations and requirements of both parties, then the handling of TSTC will take place more smoothly.

1.4. Experience of some commercial banks in implementing property mortgage contracts

Through the mortgage activities of the bank, the author found that Techcombank, Bac Ninh branch and Southeast Asia Commercial Joint Stock Bank, Hai Duong branch have been successful in implementing the mortgage contract. The specific reasons are as follows:

For Techcombank, Bac Ninh branch, the organization of the implementation of asset mortgage contracts, including strict regulations on the form and conditions for ensuring asset mortgage contracts as well as the inspection and settlement of disputes over asset mortgage contracts.

For Southeast Asia Commercial Joint Stock Bank, Hai Duong branch has achieved success thanks to flexible policies in mortgage contracts such as handling mortgaged assets; regulations on rights and obligations to participate in signing contracts; organization of implementation of property mortgage laws...

1.4.1. Experience of Techcombank, Bac Ninh branch

Bank name: Techcombank, Bac Ninh Branch

Address: No. 20, Nguyen Dang Dao, Dai Phuc Ward, Bac Ninh City, Bac Ninh Province On September 2, 2000, Techcombank, Bac Ninh Branch was established.

Established, headquartered at No. 20, Nguyen Dang Dao, Dai Phuc Ward, Bac Ninh City, Bac Ninh. Techcombank, Bac Ninh Branch has the current function of comprehensive and diversified business in the housing sector; currency and credit business through capital investment, credit supply and housing services; exploiting and expanding the market, adding new products and services to business. In Bac Ninh, the bank is one of the top 10 commercial banks, with many years of operating experience.

Lessons learned

Form of mortgage contract: Mortgage contract is made in writing, including the content of loan conditions, purpose of loan, form of loan, loan amount, interest rate, loan term, form of security, value of collateral, method of debt repayment and other commitments agreed by the parties. The contract form provided by banks is not a model contract according to the provisions of the Civil Code, but only a draft for convenience in the process of negotiating and signing the contract. The borrower can completely negotiate with the bank to change any content.

Conditions to ensure the implementation of the mortgage contract: To minimize the risk in case the borrower cannot repay the debt, the bank only agrees to lend capital to the borrower when pledging, mortgaging assets or having a third party guarantee. These security measures act as a backup method when risks occur. At that time, to ensure the obligations guaranteed in the mortgage contract, the parties sign a loan guarantee contract.

Checking and resolving disputes over mortgage contracts : The bank increases inspection, supervision and handling of violations in activities related to signing, liquidation and resolving disputes over mortgage contracts. When a borrower is unable to repay the debt, the bank allows and respects the right of the parties to negotiate when a dispute arises, which will minimize legal conflicts.

may arise during the process of resolving disputes. If an agreement cannot be reached, the bank will take the matter to court to resolve it according to the commitments stated in the contract.

1.4.2. Southeast Asia Commercial Joint Stock Bank, Hai Duong Branch Bank name: Southeast Asia Commercial Joint Stock Bank, Hai Duong Branch. Address: 122 Thong Nhat Street, Hai Duong City.

Southeast Asia Bank Hai Duong was established in 1994, one of the earliest banks established in Vietnam. Currently, Viettin Bank, Hai Duong Branch has a charter capital of 5,068 billion VND, one of the 10 largest joint stock commercial banks in Vietnam. In Hai Duong, Southeast Asia Bank officially opened on February 26, 2008, headquartered at 122C - 124A Thong Nhat Street, Le Thanh Nghi Ward, Hai Duong City. Up to now, the bank has expanded its network of operations with many affiliated transaction offices such as: Nguyen Luong Bang Transaction Office, Hai Tan Transaction Office, Kim Thanh Transaction Office, Sao Do Transaction Office, Gia Loc Transaction Office, Thanh Dong Transaction Office.

Lessons learned

Handling of mortgaged assets in the mortgage contract : The mortgage contract is appraised by the bank, the assets are valued according to the actual value of the assets, the asset valuation record is drawn up and the credit contract is signed and disbursed according to the correct procedure.

Rights and obligations of the parties signing the contract: The rights and obligations of the parties must always be clearly stated in the credit contract. The borrower is only allowed to use the money for what purpose. When must the loan be repaid?... and vice versa, the bank is obliged to disburse the correct amount and time as agreed, as well as having the right to check and monitor the process of using the loan or collecting debt according to the provisions of the credit contract signed by both parties.

Promote activities to organize the implementation of property mortgage laws; Enhance the capacity, responsibility, and ethics of bank staff with customers regarding the procedures for handling property mortgage contracts; Build and perfect

Secured transaction registration system, modernizing the storage system, connecting and exchanging secured transaction information.

1.4.3. Applying the experience of some banks to PGbank Quang Ninh

Through the experiences of Southeast Asia Commercial Joint Stock Bank, Hai Duong branch and Techcombank, Bac Ninh branch on organizing the implementation of asset mortgage contracts, we can draw the following experiences for PGbank Quang Ninh:

+ It is necessary to promote activities to organize the implementation of property mortgage laws; Improve the capacity, responsibility, and ethics of bank staff with customers regarding the procedures for resolving property mortgage contracts.

+ It is necessary to build and perfect the system of agencies registering secured transactions, modernize the system of storing, connecting, and exchanging information on secured transactions; Strengthen service activities, legal advice, and legal aid in the implementation of property mortgage contracts.

+ It is necessary to strengthen inspection, supervision and handling of violations in activities related to signing, liquidation and dispute resolution of property mortgage contracts. At the same time, strictly implement the provisions on Rights and obligations of the parties participating in signing the contract.

In addition, through the assessment of limitations; viewpoints on ensuring the implementation of asset mortgage contracts, the solutions proposed to improve the efficiency of using asset mortgage contracts between PGbank Quang Ninh and Customers are specifically as follows:

+ Solutions to promote activities of organizing the implementation of mortgage contracts

product

+ Improve the capacity, responsibility and ethics of bank staff towards customers.

procedures for handling property mortgage contracts

+ Build and perfect the system of agencies registering secured transactions, modernize the system of storing, connecting and exchanging information on secured transactions.

+ Strengthen service activities, legal advice, legal aid in implementing property mortgage contracts

+ Strengthen inspection, supervision and handling of violations in activities related to signing, liquidation and dispute resolution of property mortgage contracts.

+ Improve the efficiency of concluding and implementing mortgage contracts.

CHAPTER 2

CURRENT STATUS OF MORTGAGE CONTRACT BETWEEN PGBANK QUANG NINH AND CUSTOMERS

2.1. Introduction to PGbank Quang Ninh

2.1.1. History of formation and development

Bank name: Petrolimex Joint Stock Commercial Bank, Quang Ninh branch (PG Bank Quang Ninh)

Address: 156B Le Thanh Tong, Ha Long City, Quang Ninh Province.

In 2009, PG Bank Quang Ninh Branch officially came into operation. Up to now, the branch has established a solid position in the banking and finance sector of the Quang Ninh mining land.

In 2013, the bank expanded 2 more transaction offices in Cam Pha and Ha Tu and developed a team of more than 50 employees. PG Bank Quang Ninh has been affirming its position as a "young and strong" branch with a rapid growth rate in terms of scale of operations and business results that are always leading the PG Bank system. Not only contributing to the business results of the entire system, PG Bank Quang Ninh has also made positive contributions to the overall development of the provincial banking industry as well as making efforts to contribute to the people of the mining area.

In 2018, PG Bank launched and opened Cam Pha Transaction Office - Quang Ninh Branch on the basis of moving to a new location at 398B, Group 1, Area 1B, Cam Trung Ward, Cam Pha City, Quang Ninh Province. The new transaction office is located on Tran Phu Street, about 100m from Dia Chat Market (the largest central market in Cam Pha City), this is the main road of Cam Pha City, a crowded, bustling residential area with convenient traffic.

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