Back to Glossary of Terms

Definition for

Mortgage

A written instrument that, when duly recorded in the appropriate county records, creates a lien against a parcel of real property, which lien secures consensual debt. A mortgage is an agreement between two parties (mortgagor and mortgagee); in contract to a deed of trust, which involves three (grantor, beneficiary and trustee). Mortgages are treated as either (1) a conveyance of legal title to the property (title theory), in which case legal title is re-conveyed to the owner when the obligation is fully satisfied; or (2) a lien against the property (lien theory), in which case the lien is released when the obligation is satisfied. The distinction is important in the event of default – in a lien theory jurisdiction the mortgagee is not entitled to possession of the property until it has pursued its remedy in foreclosure. A purchase money mortgage is given to a lender to secure a loan for all or some of the purchase price of a parcel of real property. The lien evidenced by a purchase money mortgage is, by law, superior to that of a judgment against the mortgagor; notwithstanding the fact that a transcript of judgment may have been recorded before the purchase money mortgage. Compare deed of trust. See lien.

Not what you're looking for?

Check out other glossary terms or Send us a Message and we're happy to answer your questions!