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.

More at

Tuesday, March 25, 2008

American confidence is now at its lowest since 1973

The confidence of American consumers has plunged in March to its lowest level for the last five years. The tightening of credit, inflation and deterioration of the job market is bringing many to believe that the economy is now in recession.

The Conference Board, a research group supported by business, said Tuesday that its consumer confidence index tumbled to 64.5 in March, down from 76.4 in February. This was significantly less than the index of 73.0 expected by economists surveyed by the firm Thomson/IFR.

The index is weakening since July and its evolution is scrutinized, since a decline in consumer confidence tends to lead to a slowdown in consumer spending, which then tends to slow the economy.

The director of the Research Center of the Conference Board, Lynn Franco, said that the index recorded in March was the lowest since the 64.1 noted in March 2003, just before the American invasion of Iraq. She said that a new decline is expected, since consumers are very pessimistic.

Two other related indices have also fallen. The first, which reflects current economic conditions, is now at 89.2, down from 104.0in February. The second one, which reflects the economic conditions to come, crashed at 47.9, its lowest level in 35 years, compared with a level of 58 in February. In December 1973, this index stood at 45.2, in the wake of the Arab embargo on oil and the Watergate crisis.