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.

Tuesday, May 6, 2008

Real estate seizures: The Fed's chairman asks Congress to react

The chairman of the U.S. Federal Reserve Ben Bernanke warns against the dangers that cast on the economy the late payment of mortgage loans and increasing real estate seizures in the USA. He urges Congress to take additional steps to defuse the problem. Foreclosures are not the solution.

"High levels of delinquency and seizures may have significant negative effects on the real estate market, financial markets and the economy in general," said Ben Bernanke in a speech Monday evening. "It is in everyone's interest" to do what is necessary to avoid preventable seizures, "he added.

The Fed's chairman was speaking at the Superior School of Commerce, Columbia University, New York.

Monday, May 5, 2008

According to Warren Buffett: The enterprises victim of the financial crisis deserve their fate

OMAHA, Nebraska - The American billionaire Warren Buffett and Charlie Munger believe that the difficulties faced by many financial institutions because of the credit crunch are well deserved.

The chairman and vice-chairman of the holding company Berkshire Hathaway (BRK.A) reported Sunday that financial companies who abused mortgages at high risk and who now record large losses do not deserve much sympathy.

Buffett said that the current financial crisis was a consequence of a system that encouraged managers to "make nice drawings."

Buffett and Munger spent almost three hours to answer questions from reporters Sunday, during their only press conference scheduled for this year. The press conference was part of the annual meeting of shareholders of Berkshire Hathaway held Saturday in Omaha, Nebraska and attended by 31 000 people.