Edge of Bankruptcy

Submit Enquiry

Name

Email

Phone:

Enquiry Type

Comments

Enter Code:
Captcha

Mortgage Information for the creditor and debtor

A mortgage is a process of using assets as security for the compensation of a debt. The term mortgage refers to the legal apparatus used in securing a property; however it is also normally used to refer to the debt secured by the mortgage. In the majority of jurisdictions mortgages are strongly linked with loans secured on real estate rather than other property and in some cases merely land may be mortgaged.

Arranging a mortgage is seen as the typical method by which individuals or businesses can purchase residential or commercial real estate with no need to pay the full value immediately. In many countries it is usual for home purchase to be funded by a mortgage. In countries where the requirement for home ownership is highest, strong domestic markets have developed, particularly in Great Britain, Spain and the United States.

History of mortgage

At common law, a mortgage was transference of land that on its face was absolute and conveyed a fee simple estate, save for which was in fact conditional, and would be of no effect if certain conditions were not met. The conditions could usually be, but not necessarily, the repayment of a debt to the original landowner. The mortgage debt remained in effect whether or not the land could productively produce an adequate amount of income to repay the debt.

The difficulty with this arrangement was that the lender was total owner of the property and could sell it, or refuse to reconvey it to the borrower, who was in a feeble position. Increasingly the courts of equity began to defend the borrower's interests, so that a borrower came to have a complete right to insist on reconveyance on redemption. This pact, whereby the mortgagee (the lender) was on assumption the absolute possessor, but in practice had few of the practical rights of ownership, was seen in many jurisdictions as being with embarrassment artificial.

By statute the common law position was distorted so that the mortgagor would keep hold of ownership, but the mortgagee's rights, such as foreclosure, the power of sale and the right to take possession would be secluded.

Creditor and Debtor- two pillars of mortgage

There are different terms assigned to particular persons and processes. Some of them are discussed as follows.

•Creditor: The creditor has legal rights to the debt secured by the mortgage and frequently makes a loan to the debtor of the purchase money for the property.

•Debtor: The debtor or debtors must meet the requirements of the mortgage conditions imposed by the creditor so as to avoid the creditor enacting provisions of the mortgage to recover the debt. Usually the debtors will be the individual homeowners, landlords or businesses who are purchasing their property by way of a loan.

Legal Aspects

There are essentially two types of legal mortgage: mortgage by demise and mortgage by legal charge. In a mortgage by demise, the creditor becomes the possessor of the mortgaged property until the loan is repaid in full. This is known as redemption. This type of mortgage takes

•the form of transference of the property to the creditor,

•with a stipulation that the property will be returned on redemption.

In a mortgage by legal charge,

the debtor remains the officially authorized possessor of the property,

the creditor gains sufficient rights over it to enable them to enforce their security, such as a right to take possession of the property or sell it.

To protect the lender, a mortgage by legal charge is more often than not recorded in a public register.

Since a mortgage loan is the largest debt owed by the debtor, banks and other mortgage lenders run title searches of the real property to make certain that there are no mortgages already registered on the debtor's property that might have higher priority!

Robin Stevens is a professional mortgage evaluator and writes regularly for http://mortgage.blogtastic.com

This article is free for republishing
Source: http://www.articlealley.com/article_65691_19.html


Don't Miss...
  1. Legal Mortgage
  2. Mortgages, True Costs Revealed - Early Redemption Charges
  3. Finding the Best Mortgage Loans
  4. Mortgage refinance- all your financial problems solved
  5. Mortgage Law
  6. Mortgages guide 101
  7. ACCOUNTS RECEIVABLE FINANCING- WORK
  8. Home Loans- Loans for homeowners
  9. California Reverse Mortgage Lender: the Best Companion for Senior Citizens
  10. Mortgage loans Obtaining Mortgage Loans Depends on FICO scores
  11. 4 Important Questions to Ask Before Refinancing Your Mortgage
  12. Digging Out of Debt with Cheap Secured Loans
  13. How To Use A Current Account Mortgage
  14. Loans Can Be Good Loans Can Be Bad
  15. Bloopers And Blunders While Agreeing On A Mortgage
  16. Knowing Your Credit Score Is Essential In Preventing Bankruptcy
  17. Protection from Mortgage Scams
  18. Step Forward With Confidence – Step Forward With Secured Loans
  19. Unsecured Loans: Secure your dreams without risking the security of your valuables
  20. Loans in UK: An overview
  21. Unsecured Loans: Fulfill Needs Without Risking Assets
  22. Bad Credit Loans Online: Providing the Technical Edge
  23. Small business loans - Loans for the budding businesses
  24. A Guide to Secured Loans
  25. What to Ask Your Mortgage Broker
  26. Self Employed Mortgage Issue – Lots of Assets, Little Income
  27. Hidden Dangers Of Student Loans
  28. What Is An Adverse Commercial Mortgage
  29. Debt Consolidation Loans and You
  30. Payday Loans – Fast, Easy And With No Credit Check
Latest...
  1. 4 Effective Ways to Minimize Your Interest Paid for Your Mortgage
  2. Bad Credit Mortgages Made Easy!
  3. Spanish Mortgages - Widen Your Horizons
  4. Mortgage Problems and the Myth of Foreclosure Help
  5. Flexible Mortgage Guide
  6. 100% Shared Ownership Mortgages
  7. Mortgage information for first time buyer
  8. Don't be Scared to Refinance Your Mortgage!
  9. Mortgage Adviser Courses
  10. Second Mortgages or a Further Advance

© Edge of Bankruptcy 2008. All Rights Reserved