international mortgage conflict-of-laws enforcing-judgment
Am I obligated to pay a mortgage if a region is annexed?
<p>This is a hypothetical question.</p>

<p>Suppose I buy a house and have a mortgage. Later, the region my house is in is annexed by another country. Let's assume also that the mortgage I took out is based in the region's former owner.</p>

<p>As a home owner, I would love to ignore my creditors located across the border.</p>

<p>My question is, <strong>what could the bank do to collect payment across a border when tensions are high?</strong></p>

<p>The law applicable to immovables is  the law of the situs (<em>lex rei sitae</em>), i.e. the law of the country where the immovable property is located. This is important because this law changed after the annexation. Therefore, the mortgage may not exist anymore as a security. The <em>lex rei sitae</em> in regard to immovables is usually not subject to a choice of law agreement. Consequently, the law of the country of the creditor, which applied to the mortgage agreement is not applicable.</p>

<p>As far as the loan is concerned, the courts in the new country have jurisdiction over a claim for payment under the loan agreement and may apply the law of the country of the creditor and order payment. If you are unable to make payments, your house maybe subject to insolvency rules and sold, the proceeds then paid to your creditors.</p>

<p>The country of the creditor may also have jurisdiction, if you are still a national of this country and nationality is a ground for jurisdiction in that country. Assuming the property is your only valuable asset, a judgment in favour of the creditor needs to enforced in the "new" country. Whether this actually happen, depends on the law of the "new" country, and most importantly probably on the relationship between the two countries after the annexation.</p>

<p>The outcome would come down to a case by case basis resolution. </p>

<p>For example, the American Revolution was not held to invalidate private debts owed to British debtors (indeed, the U.S. Constitution was designed with constitutional protection for foreign creditors), but I am relatively confident that ISIS does not allow creditors from Syria or Iraq to enforce private debt obligations in the territory that it controls.</p>
