Mortgage

From Encyclopediak

Mortgage, the transfer of property, either real or personal, as security for the payment of a debt or the performance of a legal obligation. The debtor is called the mortgagor, the creditor, the mortgagee. The conveyance is absolute in form, but it is subject to 3 proviso by which it is to become void, or by which, the pledge is to be reconveyed upon payment to the mortgagee of the debt with interest, at the expiration of the time specified. If this condition is not fulfilled the mortgagee gains absolute ownership at law, but by equity the mortgagor is allowed a limited time in which to redeem the property. In many states the mortgagee's common-law right to take possession by ejectment has been cut off, and he can secure possession of the mortgaged property only through foreclosure, a suit in equity in which he asks the court to deny the mortgagor further time in which to redeem the property. Mortgages can be sold to third parties and property under mortgage can also be sold. When real estate is sold before the mortgage is due the buyer assumes the mortgage and pays the seller the balance of the purchase price. When several mortgages are given upon the same property they have priority in the order of their creation unless otherwise provided. Courts have always favored the mortgagor's right to redeem, and at any time before the extinction of the mortgage will allow him to compel a cancellation and surrender upon payment of the mortgage indebtedness, with interest, and as an incident to the redemption, will compel the mortgagee to account for any profits which he has received. If Personal Property or chattels are given as security the mortgage is known as a chattel mortgage. All mortgages must be recorded in the office of the recorder of the county in which the mortgage is given.