Loans or mortgages by deposit of title deeds are not a new phenomenon. Individuals borrowed by depositing their deeds of ownership with the lender, whose objective is to create a guarantee for the lender against late payments. However, a mortgage by deposit of title is different from a regular mortgage or a loan from a bank. In the case of a fair mortgage, the lender has no legal right to take possession of the mortgaged property or to claim a guarantee of rents and profits resulting from that property.  A mortgage by deposit of title can be made orally, but if the parties reduce it to the letter and the letter itself constitutes a mortgage contract that essentially establishes the mortgage, the brief must be registered, notwithstanding Section 59 of the TP Act.  The key question is whether the parties actually intend to conclude that the document alone must be proof of the transaction.  At Hari Sankar vs. Kedar Nath, 66 I.A. 184, the title deeds were filed with a memorandum, when part of the agreed advance was made.
A few days later, at the time the balance sheet was advanced, another memorandum was registered to replace the old one, and it was a formal document “agreed here” on the essential terms of the transaction and referring to “funds guaranteed here. It also gave the lender explicit purchasing power. Lord Macmillan, after reviewing the previous decisions of the board, noted that the document requires registration, so that the current jurisprudence and the opinion of the authorities, at least in Uttarakhand, tends to obtain in favour of the registration of a memorandum that creates the mortgage by the filing of title deeds. If you are looking for a home loan, please consult the Memorandum for Deposit of Title Deed (MODT abbreviated). What is MODT? A MODT is a bond given by home loan borrowers who claim to have filed securities documents with lenders. It now applies to all types of home loans. The mortgage is a transfer of a stake in a given property to guarantee payment of advanced money through a loan, an existing or future debt or the execution of an agreement, which may result in financial liability.