Real Estate Finance
A loan secured by real property, where the borrower pledges the property as collateral for repayment.
A mortgage is a two-party instrument: the borrower (mortgagor) pledges the property as security, and the lender (mortgagee) holds a lien until the debt is repaid. In New York (a lien theory state), the lender holds a lien but the borrower retains title. A mortgage consists of two documents: the note (promise to repay) and the mortgage instrument (security interest in the property). If the borrower defaults, the lender must foreclose judicially.
Exam Tip
In NY, mortgagor = BORROWER (gives the mortgage). Mortgagee = LENDER (receives the mortgage). This reversal trips up many exam takers.
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Real Estate Finance
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NY Real Estate Finance
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