Usufractuary mortgage is a special type of mortgage where the mortgagor delivers possession, either expressly or by implication, and binds himself to deliver possession of the mortgaged property to the mortgagee. He authorizes him to retain such possession until payment of the mortgage money. The mortgagee is also authorized to receive the rents and profits accruing from the property and to appropriate it towards interest or in payment of the mortgage money, or partly for interest or partly in payment of the mortgage money. Here the traits are (a) the possession of the mortgaged property is transferred to the mortgagee (b) he receives the income from the property e.g. rent, profit etc until the repayment of the loan (c) the title deeds remain with the owner. Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property or any part of such rent and profits and to appropriate the same in lieu of interest, or in payment of the mortgage-money, or partly in lieu of interest or partly in payment of the mortgage-money, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee.
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