of that process they completed when buying a house.
Many people only really know for sure that they found a house
they wanted and somebody loaned them money and they got it.
Some never even asked "What is a mortgage?"
A major part of the current Real Estate Market Crisis is that
many people had no idea what they actually signed up for when
they signed on the dotted line. Some dealt with brokers who did
not disclose all the fees, costs and conditions of the borrower's
responsibilities of the loan after "closing" in their haste to
"make a few bucks" off the closing process.
In some cases, these current "toxic loans" had numerous cases
of violations, not uncommon in loans created or refinanced in
the last 3 years...
So...what is a mortgage?
A mortgage is the transfer of an interest in property (or the equivalent in law - a charge) to a lender as a security for a debt - usually a loan of money. While a mortgage in itself is not a debt, it is the lender's security for a debt. It is a transfer of an interest in land (or the equivalent) from the owner to the mortgage lender, on the condition that this interest will be returned to the owner when the terms of the mortgage have been satisfied or performed. In other words, the mortgage is a security for the loan that the lender makes to the borrower.
Mortgage lender
Mortgagee is a party to whom property is mortgaged, usually a lender. Mortgage provides security to the lender. Given the large sum of money involved in financing a property, a mortgage lender will usually want security for the loan that will provide a claim upon that security and will take precedence over other creditors. A mortgage accomplishes this security.
The lender loans the money and registers the mortgage with the title to the property. The borrower gives the lender the mortgage as security for the loan, receives the funds, makes the required payments and maintains possession of the property. The borrower has the right to have the mortgage discharged from the title once the debt is paid. If the mortgagor fails to repay the loan according to the conditions set forth by the lender, then the mortgagee reserves the right to foreclose on the property.
Borrower
Mortgagor is a party who mortgages property. A mortgagor owes the obligation secured by the mortgage. Generally, the debtor must meet the conditions of the underlying loan or other obligation and the conditions of the mortgage. Otherwise, the debtor usually runs the risk of foreclosure of the mortgage by the creditor to recover the debt. Typically the debtors will be the individual home-owners, landlords or businesses who are purchasing their property by way of a loan.
Most buyers of real property would have difficulty saving enough money to make an outright purchase of real estate. The use of debt increases a buyer's ability to buy through a combination of down payment and debt. As a result a real estate transaction seldom occurs without buyers relying on borrowed funds.
To Learn more...go to Wikipedia, the Free Encyclopedia....Here is a list of the information available under "what is a mortgage?"
Contents
[hide]- 1 Participants and variant terminology
- 2 Mortgage lender
- 3 Borrower
- 4 Other participants
- 5 Default on divided property
- 6 Legal aspects
- 7 History
- 8 Foreclosure and non-recourse lending
- 9 Mortgages in the United States
- 10 See also
- 11 Notes and references
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