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.

Friday, March 28, 2008

Democrats and Republicans Housing Crisis Plans

The housing crisis was a big thing in the presidential race this week. For good reason: Recent data illustrate that nearly a million American households are at risk of foreclosure, 71% more than a year ago. Nearly 6% of all owners are past due on their mortgages.

And the presidential candidates are trying hard to persuade voters that they have the best plan for fixing the problems. How do their plans compare?

The biggest divergence between Republican John McCain and his Democratic rivals Barack Obama and Hillary Clinton is over the government's role.

The Democratic candidates argue that if the Federal Reserve can help the purchase of Bear Stearns with $29 billion, then the federal government can also help the struggling homeowners.

But McCain contends that the Fed's intervention in the financial markets was planned to stabilize Wall Street - which in turn will help calm down the mortgage market and therefore help borrowers.

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