Legal basis: Civil Code of People's Republic of China (PRC).
Article 207 State, collective and private property rights and the property rights of other obligees are equally protected by law, and no organization or individual may infringe upon them.
Article 410 Where the debtor fails to perform the due debt or realize the mortgage right according to the agreement of the parties, the mortgagee may agree with the mortgagor to discount the mortgaged property or give priority to compensation with the price of auction or sale of the mortgaged property. If the agreement harms the interests of other creditors, other creditors may request the people's court to cancel the agreement.
If the mortgagee and the mortgagor cannot reach an agreement on the way to realize the mortgage, the mortgagee may request the people's court to auction or sell the mortgaged property.
Where the mortgaged property is discounted or sold, it shall refer to the market price.