Cover assets

(1) Only mortgages may be used as cover for mortgage Pfandbriefe under section 1(1), second sentence, no. 1, insofar as they satisfy the requirements of sections 13 to 16.
(2) Where the Pfandbrief bank holds a mortgage on land that it has acquired to prevent a loss on the mortgage, it may use the mortgage for cover only on the basis of a new determination of mortgage lending value under section 16.
(3) The registered cover assets also extend to all claims of which the Pfandbrief bank is the holder and that are directed at the economic substance of the land, in particular claims to which the mortgage would extend, for domestic land, under sections 1120, 1123, 1126, 1127 and 1128 of the German Civil Code, to claims from declarations creating an independent payment obligation recorded in the same notarial deed as the creation of the land charge, and to the Pfandbrief bank's claims, under its own right or an assigned right, from insurance under section 15, to the transfer of the land or rights equivalent or comparable to land, and to the payment of the proceeds of a realisation. The first sentence applies accordingly to claims under section 251(3), first sentence and section 253(4), third sentence of the Insolvency Code and section 64(3), first sentence and section 66(5), third sentence of the Business Stabilisation and Restructuring Act.