A real estate
mortgage is a contract between a debtor (called a mortgagor) and
creditor (called a mortgagee) wherein interest in real property is
transferred as security for a loan or other obligations.
The mortgagee is
in most cases a financial institution who provides the loan to the
mortgagor in exchange for the security interest. A mortgage is
usually paid in installments that include payment of both interest
and the principal amount.
Failure to make
these payments would result in foreclosure of the mortgage.
Foreclosure is the legal process by which an owner looses his
mortgaged property to his creditors due to default of payment of a
debt.
Foreclosure
typically involves a forced sale of the property at public
auction, with the proceeds being applied to the mortgage debt.
The law of mortgages is mainly governed by state
statutory and common law. Mortgagees are regulated by federal or
state law or agencies depending on under whose law they were
chartered or established.