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, June 22, 2009

Interest Rate: The Fed wants to calm fears

The leaders of the U.S. Federal Reserve (Fed) are studying the possibility of using the policy statement Wednesday to stop any speculation that they are willing to raise interest rates this year.

Policy makers at the Fed have already indicated their acceptance of increased rates of return on Treasury bonds over the long term, but some fear the odds on a premature rise in interest rates.

In addition, the staff of the Fed focused on the decision of the Bank of Canada to waive any increase in rates until 2010, according to a person aware of this issue, without having come to the conclusion that the ad was effective.

For example, on 21 April, the Bank of Canada reduced its key rate to 0.25%, the lowest in its history, stating that "we can expect the target rate for loans of one day remains at its current level until the end of the second quarter of 2010, the situation is subject to the outlook for inflation."

For the Fed, an option might be to focus in his statement on Wednesday that the more marked slowdown in the labor market and manufacturing activity in the United States will keep inflation low and temper the recovery, said Michael Feroli, economist at JPMorgan Chase in New York and former member of the Fed.

What is at stake is to keep borrowing costs low enough to promote a sustained recovery without linking the U.S. to a single action plan.

"There are ways (for decision by the Fed) to highlight their expectations for lower interest rates without committing too much," says Lou Crandall, chief economist at Wrightson ICAP, Jersey City, New Jersey.

The Fed chairman, Ben S. Bernanke and his colleagues of the Federal Open Market (FOMC) will meet in Washington tomorrow and Wednesday. Economists forecast that they will leave the rate by the Fed in a range from 0 to 0.25%. Policymakers will also discuss any changes to their commitment to purchase up to 300 billion U.S. Treasury bills and 1450 billion U.S. in debt related to real estate.

In its last two statements, the FOMC said that economic conditions are likely to justify the exceptionally low rate of federal funds for a long time. "

The markets have already indicated that they no longer take account of this speech. Treasury bills of two years have slipped since a report by the U.S. government reported on 5 June, the smallest loss of jobs in eight months, the rate of return of 1.14 is good % early yesterday afternoon in New York, compared to 0.91% in early June.

Futures contracts on the U.S. federal funds for March show a yield of 0.705%, which indicates a certain probability of rate hikes by the first quarter of 2010.

If job losses are declining, officials from the Fed, however, have often repeated that the unemployment rate will likely increase in coming months.