Tuesday, June 23, 2009

the mortgage

the mortgage is special contract by which the borrower conveys to the lender a security interest in the mortgage property. because the property is being pledged by action of the borrower, the borrower is referred to as the mortgagor, or Grantor of the mortgage claim. the lender, who receives the mortgage claim, is known as the mortgagee. Under traditional English common law, a mortgage temporarily conveyed title of the property to the mortgagee. this title theory tradition has been largely replaced by the more modern lien theory. Under the lien theory, the mortgage gives the lender the right to rely on the property as security for the debt obligation defined in the note, but this right only can be exercised in the event of default on the note.
Because the mortgage conveys a complex claim for a long period of time, it must anticipate numerous possible future complications. Most of the clauses in a mortgage are for this purpose.

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