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.

Wednesday, February 18, 2009

Obama promises 75 billion for homeowners

The administration of U.S. President, Barack Obama, will spend 75 billion U.S. dollars to help homeowners at risk.

The government will make use of mortgage financing agencies Fannie Mae and Freddie Mac to launch this measure, announced Wednesday the Treasury Department. "With this plan, we will help between seven and nine million families to restructure or refinance their mortgages or have their loans modified" will say Mr. Obama in a speech scheduled in Phoenix, an area particularly affected by the crisis in real estate.

Mr. Obama defended the urgent need for measures announced earlier in the day by his administration: the plan will prevent the worst consequences of this crisis can cause even “more havoc in our economy," he said according to the text of the speech released in advance by the White House.

"And all of us will pay an even steeper price if we allow this crisis to deepen -- a crisis which is unraveling homeownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, every American will benefit." he said.

Help doubled

A few minutes earlier, the Treasury announced that it would double its aid to Fannie Mae and Freddie Mac, bringing 100 to 200 billion U.S. dollars each.

Last September, the takeover over by the federal state of these two giants victims of the mortgage crisis was preceded little by the global financial crisis.
The Treasury said that the two agencies were "critical to the functioning of the system of financing of real estate" and played "a central role in making affordable mortgage rates and maintain stability and liquidity in the mortgage market."