Registration Range of an Assigned Mortgage

If you are going to buy a house at judicial auction, understanding how the registry rank of the assigned mortgage works can save you thousands of euros and a lot of headaches. It is a fundamental detail as it determines which charges are cancelled and which could remain in force after the adjudication. Here we explain what the law says, what mistakes courts and registrars make, and how to protect yourself before bidding.

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What is the registry rank of a mortgage and why does it matter in a judicial auction?

The registry rank determines the order of priority among the encumbrances registered on a property.

In a judicial auction, only the charges subsequent to the foreclosed mortgage are automatically cancelled. The previous ones or those with preferential rank remain.

Therefore, knowing which mortgage is being foreclosed and in which registry position is key to avoid surprises.

What happens if the mortgage has been assigned?

In many proceedings, the mortgage has been previously assigned to a vulture fund or collection company, which continues the foreclosure. Here the question arises:

"Does it still have the same rank?"
"Or could it be considered subsequent and lose priority?"

What do the regulations say?

At the legal and registry level, the framework is clear:

1. Mortgage Law - Article 149.
   "The assignee shall be subrogated to all the rights of the assignor."
   This includes:
   1. The same registry rank.
   2. The right of foreclosure
   3. The agreed interest
   4. And the procedural costs

That is to say: even if the creditor changes, the mortgage maintains its original force and priority.

2. Civil Code - Article 1526
"The assignment of a credit, right or action shall not take effect against a third party unless its date must be considered certain (...). If it refers to real estate, from the date of its registration in the Registry."

This means that: Opposability against third parties requires registration. But this inscription does not alter the pre-existing rank.

3. Mortgage Regulation - Article 106
"Registrations shall be made by virtue of public deed, court order or authentic document (...)."

Applies also to the assignment of mortgage: the change of ownership is registered, not a new right with a different rank.

So, what is the real risk?

Although the assignment of mortgage does not legally change its rank, legal uncertainty may appear if:

1. The adjudication decree mentions as executed the registration of the assignment, and not the original mortgage.
2. The order of cancellation of charges is not well drafted or is ambiguous.
3. The registrar erroneously interprets which charge is being executed.

In these cases, subsequent mortgages or liens may not be correctly cancelled, leaving the successful bidder with encumbrances that he thought were eliminated.

Real case: Judicial Auction in Vera (Almería)

In a recent analysis, we reviewed a judicial auction of an apartment in Vera with several registered encumbrances. The foreclosed mortgage originally belonged to Banesto and was assigned to a collection company.

The mortgage was registered in the 6th inscription, while the assignment was registered in the 10th inscription.

Although the law says that the rank of the original mortgage is maintained, we warned the client of the risk:

"If the court did not correctly identify the 6th registration as the executed charge, there could be problems with the cancellation of subsequent charges, such as mortgages from BBVA or liens from the Treasury and Social Security."

Our legal recommendation

Before bidding in any judicial auction:

1. Verify which registry entry is actually being executed.
2. Make sure that the adjudication decree clearly states it.
3. Ask for a detailed order of cancellation of charges.

And if in doubt, demand an express rectification before registering anything.

Conclusion

The assignment of mortgage does not affect the registry rank, but a bad management in the court or in the registry can ruin your investment.

In Valido Home we analyze every detail so that you can buy safely, without surprises.

Are you thinking of buying an apartment at auction and do not want to take unnecessary risks?