Quote Originally Posted by Montmorency View Post
Just to oblige with a rag on the former Russian Empire, I'd like to drop a story:

A guy I know bought an apartment in Ukraine for cheap after its owner died.

Problem is, the former owner-man had taken out a mortgage off the books, which no one knew about until after the property was sold to New Guy, so now the bank who 'owns' the mortgage is suing New Guy.

Apparently, in the Ukraine mortgages are attached not to the borrower, but to the property itself*; thus, the bank can demand that New Guy pay up on this mature loan - which the previous owner had deferred or skipped out on somehow.

Again, let me emphasize that the original loan was off the books and that Ukrainian mortgages are linked not to the borrower but to the property. Also, the interest rate is like 15% or something.

...

I hope the poor fellow can settle out of court or else find some kind of loophole.

*
Spoiler Alert, click show to read: 
And this isn't how it works in the US, right? I haven't yet taken out a mortgage, and I only know a few basic generalities, but surely in the US the estate of the deceased borrower would be expected to honor the loan, or else whoever manages the property or appropriates it (and why not the bank itself, there...) - right? I can't recall who exactly New Guy bought the property from, but whoever sold it ought to be repaying any outstanding loans, right? That makes a little more sense, right?

How the hell can it make sense to transfer the mortgage to the buyer?! What a back-asswards system. In fact, I wonder if this is really even how it works in the Ukraine and whether the New Guy, as a foreigner, is getting scammed by this bank...
Mortgages are always tied to the property. That's why they're called mortgages and not credits. The deal is that you shouldn't be able to transfer ownership unless the bank okays it.