Mortgage Home Loan Or Is It?
September 29, 2008 by Guest
Filed under Mortgage Loans
Many of the things that people believe about mortgages that are actually false. A popular term for one is a mortgage home loan although it should never be referred to as a loan because it isn’t. A mortgage is a legal document between a mortgagor or the buyer and the mortgagee or the finance supplier and consists of a way for a person to purchase a property using it as security. In fact, in reality, this isn’t the debt but the security required by the lender to protect their interests for the duration of the term.
If it wasn’t for the availability of mortgages, individuals and businesses would need to find the full amount for a property in order to purchase it. There are also misconceptions about how they work so below is a description of how the process works.
As it is not a loan, the mortgagor should not be called The Borrower but mortgagor and the company providing the finance should not be called The Lender because they are the mortgagee. The document itself produces a lien on your property which is not cleared until the debt is paid.
This system works so successfully because the risk of loss on the part of the mortgagee is all but eliminated as they have legal possession of the property until the debt is completely repaid. The lien (document) is normally recorded at the local courthouse in the public records section.
So how this works is that the mortgagor (you) owns the property completely even though the mortgagee has possession of the mortgage but not the title.
However if the mortgagor or the owner defaults on his or her payments, the mortgagee has the right to dispose of the property to reclaim funds. This is the dreaded process referred to as foreclosure but if the property is used as security, then the foreclosure must go through the court system.
To ensure that everything is legal and above board, the court will place a ruling on the disposal in a process called judicial foreclosure. If you were unsure about the definition before and the subject surrounding it, I trust this information has been of use.
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