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.

Monday, April 7, 2008

Fannie Mae beefs up foreclosure guidelines

Fannie Mae announced new guidelines that will affect the loans it purchases from lenders all over the US, securitizes and then sells to investors on Wall Street. These new rules will affect potential homebuyers all across the nation, especially any homebuyer who has suffered a foreclosure in the recent past.

In an official release Monday Fannie said: “The dramatic shifts in market dynamics over the past several months have prompted us to continually review the full spectrum of our risk appetite, eligibility requirements, automated underwriting risk assessment, and pricing. It is important that we have underwriting and eligibility criteria that foster sustainable homeownership for the borrower”

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