Mortgage Law: An Overview A mortgage involves the transfer of an
interest in land as security for a loan or other obligation. It
is the most common method of financing real estate transactions.
The mortgagor is the party transferring the interest in land.
The mortgagee, usually a financial institution, is the provider
of the loan or other interest given in exchange for the security
interest. Normally, a mortgage is paid in installments that
include both interest and a payment on the principle amount that
was borrowed. Failure to make payments results in the
foreclosure of the mortgage. Foreclosure allows the mortgagee to
declare that the entire mortgage debt is due and must be paid
immediately. This is accomplished through an acceleration clause
in the mortgage. Failure to pay the mortgage debt once
foreclosure of the land occurs leads to seizure of the security
interest and its sale to pay for any remaining mortgage debt.
The foreclosure process depends on state law and the terms of
the mortgage. The most co