a.i. A second mortgage is a subsequent charge created over property already subject to a first mortgage. It ranks behind the first in priority for repayment from sale proceeds. In Ghana, under the Mortgages Act, 1972 (NRCD 96), it’s used for additional borrowing; e.g., a homeowner mortgages to Bank A, then to Bank B. Bank B’s recovery is subordinate, increasing risk, hence higher interest rates in practice at Ecobank Ghana.

ii. A sub-mortgage occurs when a mortgagee (lender) mortgages the debt/interest owed to them to another party. It’s a mortgage of a mortgage; e.g., Bank A lends on property, then sub-mortgages that receivable to Bank C for liquidity. Under NRCD 96, it transfers rights but requires notice to original mortgagor.

b. Options for XYZ Bank on default (under NRCD 96 and Act 930):

1. Sue for Money: Personal action against borrower for repayment.
2. Foreclosure: Court order vesting property in bank, rare due to equity of redemption.
3. Power of Sale: Sell property after notice/demand, without court if stipulated.
4. Appoint Receiver: Manage property to recover debt.
5. Possession: Take possession and sell or rent.

Recommendation: Exercise power of sale, as it’s quickest and cost-effective in Ghana’s market. Post-2019 cleanup, banks like GCB preferred this for NPLs, avoiding court delays; ensure valuation and BoG compliance for transparency.