Grundbuch (land register) - Registration of Mortgage Liens

If you take out a loan, you can offer your property as security to the creditor to cover the loan amount and have a Hypothek (mortgage) or Grundschuld (land charge) — so-called Grundpfandrechte (real property liens) — entered in the Grundbuch (land register) in their favour. If you fail to repay the loan claim, the encumbered property can be liquidated by way of compulsory auction. The real property liens can also be created as Briefrechte (certificated liens, i.e. with a physical certificate). Note: Grundschuldbriefe or Hypothekenbriefe (land-charge or mortgage certificates) are so-called Inhaberpapiere (bearer instruments). Any holder can dispose of the real property lien, e.g. pledge it, assign it, or have it cancelled.