a document in which the owner pledges his/her/its title to real property to a lender
as security for a loan described in a promissory note. Mortgage is an old English
term derived from two French words "mort" and "gage" meaning "dead pledge. " To
be enforceable the mortgage must be signed by the owner (borrower), acknowledged
before a notary public, and recorded with the County Recorder or Recorder of Deeds.
If the owner (mortgagor) fails to make payments on the promissory note (becomes
delinquent) then the lender (mortgagee) can foreclose on the mortgage to force a
sale of the real property to obtain payment from the proceeds, or obtain the property
itself at a sheriff's sale upon foreclosure. However, catching up on delinquent
payments and paying costs of foreclosure ("curing the default") can save the property.
In some states the property can be redeemed by such payment even after foreclosure.
Upon payment in full the mortgagee (lender) is required to execute a "satisfaction
of mortgage" (sometimes called a "discharge of mortgage") and record it to clear
the title to the property. A purchase-money mortgage is one given by a purchaser
to a seller of real property as partial payment. A mortgagor may sell the property
either "subject to a mortgage" in which the property is still security and the seller
is still liable for payment, or the buyer "assumes the mortgage" and becomes personally
responsible for payment of the loan. Under English common law a mortgage was an
actual transfer of title to the lender, with the borrower having the right to occupy
the property while it was in effect, but non-payment ended the right of occupation.
Today only Connecticut, Maine, New Hampshire, North Carolina, Rhode Island and Vermont
cling to the common law, and other states using mortgages treat them as liens on
the property. More significantly, 14 states use a "deed of trust" (or "trust deed")
as a mortgage. These states include California, Illinois, Texas, Virginia, Colorado,
Georgia, Alaska, Arizona, Idaho, Mississippi, Missouri, Montana, North Carolina
and West Virginia. Under the deed of trust system title is technically given to
a trustee to hold for the lender, who is called a beneficiary.
See also deed of trust foreclosure judicial foreclosure notice of default trust
deed
law dictionary, legal
dictionary, online law dictionary, legal terms dictionary,
online legal dictionary, legal definition, legal
terms and definition, Best online Dictionary, Law
Dictionary Software, Download Law Dictionary, law
dictionary, legal dictionary, online law dictionary,
legal terms dictionary, online legal dictionary,
legal definition, legal terms and definition, Best
online Dictionary, Law Dictionary Software, Download
Law Dictionary
