Mortgage

As common as mortgages are, there are a surprisingly large number of us who are under false impressions about the way they function, and what they actually are. The first thing to put straight is that it is not a loan, although they are normally referred to as a mortgage home loan. The property becomes a security (and legally binding contract), or mortgage, for the buyer, or mortgagor with the finance supplied by the mortgagee. 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. BTW, I found a site about home mortgage in Spanish: hipoteca vivienda. To help understand how this works, some important information is discussed here. Being the financier, the mortgagee is the person who lends funds to the mortgagor or borrower. A security measure designed for purchasing properties, called a lien, is enforced until the mortgage is cleared at the end of the term.

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. This lien than becomes a matter of public record when it is registered at the county courthouse or equivalent. Ownership of the property is then yours and cannot be transferred to anyone else until you have paid off the amount required to reverse the lien. 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.

The only right that your mortgage gives to the mortgagee over your property is to sell it to recover funds in the case that you do not pay off your debt. When this happens, the procedure that follows is called foreclosure but even at this stage it is required to go through the courts first. To ensure that everything is legal and above board, the court will place a ruling on the disposal in a process called judicial foreclosure. For the sake of clarity this is only a brief description of a much more complex subject but it should have helped explain the basic subject.


----------------------------

Sonia Galvez