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, August 11, 2008

The mortgage crisis will persist well beyond 2008

The crisis in the real estate sector will continue well beyond the end of 2008 the USA before being overcome, said Sunday U.S. Secretary of the Treasury Henry Paulson.

"I think we need to go much beyond the end of 2008 before we can forget about the problems of housing," he said from Beijing in an interview with NBC television, reiterating statements made late July.

"I think the main question (for the economy) is that of knowing when the greater part of the correction in real estate will be behind us, because until we know we will continue to experience instability in our markets," said Paulson.

He commented the heavy losses announced last week by Fannie Mae and Freddy Mac, the two major U.S. facilities in mortgage refinancing.

"They account for approximately 70% of financing loans to the USA and thus are a key to ending the crisis in this sector and restore stability in mortgages," said the Treasury Secretary, he also stressed that "the correction of the mortgage market was really the heart of the current American economic problems. He did not consider it necessary to inject more public money into these two bodies.

Mr. Paulson also said on NBC that he would not remain at his post at the Treasury whoever is the next president elected in November.

He recently met with the likely Democratic candidate for the White House Barack Obama, feeding speculation that Mr. Paulson could stay at the Treasury in January 2009 to ensure continuity in the current financial crisis.

"No, I will not stay," he said categorically in response to a question from a journalist.

"Whoever the next president-elect is, John McCain or Barack Obama, I will do my utmost to ensure a smooth transition by working closely with my successor," said Paulson.

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