It is stated earlier that a mortgage is transferring of immovable property’s interest. As a result, a mortgagee must have to transfer the interest of immovable property or mortgaged property. A mortgage of a mortgagee’s interest is known as ‘sub-mortgage’. In other words, when the mortgagee undertakes the interest of property going to be offered by mortgagor. In this case the original mortgagee would be the sub-mortgagor, and the mortgagee of the mortgaged interest would be the sub-mortgagee.

When the sub-mortgage is formed, there are no privities of contract between the original mortgagor and the sub-mortgagee. As such, if the original mortgagor pays off the debt to his mortgagee without any notice from the sub-mortgagee of his sub-mortgage, the property would be redeemed, and the original mortgage will stand extinguished. Consequently, the sub-mortgagee would lose his security, and his only remedy would be to proceed against his mortgagor personally.

Remedies for sub-mortgagees: There are only two remedies open to the sub-mortgagee.

• The first remedy is to sue for the sale of the mortgagee-rights mortgaged with him. In this case the original mortgagor is not affected.
• The second remedy, the sub-mortgagee may sue for sale or foreclosure of the mortgaged property according to the terms of the original mortgage, provided the amounts payable on the original mortgage and sub-mortgage have become due on the date of the suit.

However, before filing the suit, it should be ascertained that there is no conflict between the forms of sub-mortgage and that of the original mortgage.