| Summary: | The Mortgage Procuration Letter is a kind of the procuration letters which are given
by guarantor to other party (it is usually given by bank for charging the mortgage) by signing
the Mortgage Granting Deed. In principle, the Mortgage Procuration Letter is made because
the Mortgage Granting Deed cannot be made or signed for certain reasons yet. The main
function of the Mortgage Procuration Letter to guarantee that in the future that it determined
the relevant bank or creditor can represent a guarantor or charge the mortage. The Mortgage
Procuration Letter is regulated in Article 15, Law No. 4/1996 on the Mortgage Procuration
Letter. This study was conducted with population of 30 Mortage Procuration Letters which
collected from three public notaries of Land Deed Officials based in District of Sleman. All
30 Mortgage Procuration Letters were made as samples of the study. The results of the study
indicate that the use of Mortgage Procuration Letters were in accordance with the prevailing
legislations. The use of Mortgage Procuration Letters in loan agreement consisted of three
steps, i.e., before the use of the Mortgage Procuration Letters, the making of credit
agreement, and the giving of the Mortgage Procuration Letters. The use of Mortgage
Procuration Letters was constrained during the binding process to be the Mortgage Granting
Deeds and the registration of the Mortgage Granting Deed. Two factors were identified as the
constraints in the use of Mortgage Procuration Letters as the Mortgage Granting Deed, i.e.
expensive costs and short period of time. To overcome such constraints, efforts should be
done to renew any expired Mortgage Procuration Letters in accordance with the prevailing
legislations and to follow up to be the Mortgage Granting Deeds.
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