Mortgage

We have heard from many blogger and many News paper about mortgage that have happened on American Bank Loan System to the property business. This mortgage make the property system is uncontrolled and make the property company collapse and can overcome the problem. What is the definition of mortgage will describe more detail below.

A mortgage is the pledging of property by a borrower to a lender as security for payment of a debt. A familiar example is the home mortgage: the mortgagor (buyer) gives a mortgage on the house being bought to the mortgage (a bank, saving and loan association, or other institution that deals in mortgage loans), which provides money for the transaction. The buyer agrees to repay the principal amount of the loan and interest in a specified period of time, usually 20 to 30 years. In most states a mortgage gives the mortgage a lien, as opposed to the common law practice of granting condition title, on the house or property as security for the loan. If the borrower fails to make payments on the loan and interest due, the lender may begin foreclosure proceedings, through which the property, such as a car, as security for a loan. Corporations often borrow by issuing mortgage bonds, which are secured by mortgage on their business property. In the United States, interest rate ceiling for mortgages, as for other forms of credit, vary from state to state.

The owner of a mortgaged house who wants to obtain another loan sometimes applies for another mortgage, which is called a second mortgage because it is second in priority to the first mortgage. The interest charged on a second mortgage is higher than that on a first mortgage. In case of foreclosure, the holder of the second mortgage can recover only after the first mortgage holder has been paid.

The U.S government has entered the mortgage market to make easier for home buyers to obtain mortgages. The federal housing administration (FHA) insures mortgages by private lenders, and the Department of Veterans Affair guarantees part of the principal on loans made to veterans. The Federal National Mortgage Association is a privately owned corporation established to buy and sell government backed mortgages.