Mortgage, loan and property. What is a mortgage?

A mortgage is putting a property as a guarantee to a lender as a security for a mortgage loan.

While a mortgage in itself is not a liability or a dept, it is evidence of a debt. It is a transfer of an interest in property, from the owner to the mortgage lender, on the condition that this interest will be returned to the owner of the property when the terms of the mortgage have been satisfied or concluded.

In other words, the mortgage is a guarantee for the loan that the lender makes to the borrower. In all but a very few states, a mortgage creates a lien on the title to the mortgaged property.

Wednesday, February 20, 2008

Mortgage field-servicing firms are in for a treat

Never before seen action since the great depression

As the mortgage-lending crisis spreads, business is booming among small mortgage field-servicing firms which specialize among other things in "property preservation."

Pushing the trend: the national homeowner-vacancy rate, which measures how many vacant homes are for sale. That rate was at 2.8% in the fourth quarter of 2007, matching a record set in the first quarter of last year. It hasn't been this high since the famous Great Depression.

And it is far from finished: U.S. foreclosure filings, a prelude to vacancies, surged 75% last year to 2.2 million, according to RealtyTrac. Just for December, there were 215,749 foreclosure filings, almost double from December 2006.

All over the US, handymen, contractors and inspectors are on the front lines of a battle to keep the vacated homes free from burst pipes, vandals, rot and animals until they can be resold -- and to safeguard the integrity and living conditions of neighborhoods.

In some cases, these mortgage field men and women work for the lenders who are foreclosing on the house. In others, they act as vendors to big national middlemen who handle large volumes of foreclosures and then subcontract the fix-up work to these smaller regional shops.

While a big proportion of the companies, big and small, are private, some trade groups estimate mortgage servicing to be a $1 billion business with 8,000 to 10,000 active companies in operation.

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