- /morgaj/A mortgage is an interest in land created by a written instrument providing security for the performance of a duty or the payment of a debt.At common law, an estate created by a conveyance absolute in its form, but intended to secure the performance of some act, such as the payment of money, and the like, by the grantor or some other person, and to become void if the act is performed agreeably to the terms prescribed at the time of making such conveyance. Such a mortgage today is called an equitable mortgage. The mortgage operates as a conveyance of the legal title to the mortgagee, but such title is subject to defeasance on payment of the debt or performance of the duty by the mortgagor. The above definitions are applicable to the commonlaw (i.e. estate or title) conception of a mortgage. Such conception is still applicable in certain states. But in many other states, a mortgage is regarded as a mere lien, and not as creating a title or estate. Zeigler v. Sawyer, Tex.Civ.App., 16 S.W.2d 894, 896.It is a pledge or security of particular property for the payment of a debt or the performance of some other obligation, whatever form the transaction may take, but is not now regarded as a conveyance in effect, though it may be cast in the form of a conveyance. Still other states have adopted a hybrid or intermediate theory or category of mortgage.See also assumption of mortgage- bulk mortgage- chanel mortgage- collateral mortgage- deed (deed of trust)- release (release of mortgage)- tacit mortgage- trust (trust deed)- adjustable rate mortgage (ARM)- amortized mortgage- balloon-payment mortgage- blanket mortgage- closed-end mortgage- consolidated mortgage- bona fide mortgage (see also bona fide)- construction draw mortgage- conventional mortgage- conventional home mortgage- direct reduction mortgage- equitable mortgage- FHA mortgage- first mortgage- first mortgage bonds- fixed-rate mortgage- future advances mortgage- general mortgage- graduated payment adjustable rate mortgage- graduated payment mortgage- growing equity mortgage- judicial mortgage- junior mortgage- legal mortgage- mortgage of goods- open-end mortgage- package mortgage- purchase money mortgage- reverse annuity mortgage- second mortgage- senior mortgage- shared appreciation mortgage (SAM)- shared-equity mortgage (SEM)- straight mortgage- variable rate mortgage- mortgage bond- nonpayment on the loan- mortgage insurance@ adjustable rate mortgage(ARM).A mortgage in which the interest rate is not fixed but is tied to an index and is periodically adjusted as the rate index moves up or down. Such ARM mortgages commonly provide for an option to convert to a fixed rate mortgage.See also cap- discount index.@ amortized mortgageOne in which the mortgagor pays the current interest charge as well as a portion of principal in his periodic payment.+ amortized mortgageRepayment of a mortgage over regular specified time intervals, with equal payments. This would reduce the principal, after any monies owing for interest are applied.See amortization@ balloon-payment mortgageMortgage requiring interest payments for a specified period and full payment of principal (a balloon payment) at the end of the period.@ blanket mortgageOne which conveys title to or creates a lien on all the borrower's assets or a substantial portion of them rather than on a specific asset.+ blanket mortgageCovers two or more assets or properties which are pledged to support the given debt. A bond issue that is backed by all of the firm's real property@ closed-end mortgageOne in which neither the property mortgaged nor the amount borrowed may be altered during the term of the mortgage.+ closed-end mortgageA mortgage that does not permit additional borrowing pledging the same collateral nor prepayment. In contrast to open-end mortgage, which allows for the amortization of the mortgage and can be increased to its original mortgage amount@ consolidated mortgageA single mortgage given to replace or to combine several outstanding mortgages.+ consolidated mortgageUnification of several outstanding mortgages@ construction draw mortgageType of mortgage used to finance building construction.@ conventional mortgageThe conventional mortgage is a contract by which a person binds the whole of his property, or a portion of it only, in favor of another, to secure the execution of some engagement, but without divesting himself of possession. It is distinguished from the "legal" mortgage, which is a privilege which the law alone in certain cases gives to a creditor over the property of his debtor, without stipulation of the parties. This last is very much like a general lien at common law, created by the law rather than by the act of the parties, such as a judgment lien.@ conventional home mortgageThe common security device used by those who wish to purchase a home by transferring to the bank or other financial institution a lien or defeasible legal title in return for the price or part of the price of the home. A non-FHA or VA home loan; i.e. not backed by government insurance or security. The mortgage is conventional in that the lender looks only to the credit of the borrower and the security of the property, and not to the additional backing of another such as would be the case with an FHA insured mortgage.@ direct reduction mortgageAn amortized mortgage. One on which principal and interest payments are paid at the same time (usually monthly) with interest being computed on the remaining balance.@ equitable mortgageA specific lien upon real property to secure the payment of money or the performance of some other obligation, which a court of equity will recognize and enforce, in accordance with the clearly ascertained intent of the parties to that effect, but which lacks the essential features of a legal mortgage, either because it grows out of the transactions of the parties without any deed or express contract to give a lien, or because the instrument used for that purpose is wanting in some of the characteristics of a common-law mortgage, or, being absolute in form, is accompanied by a collateral reservation of a right to redeem, or because an explicit agreement to give a mortgage has not been carried into effect.+ equitable mortgageAn agreement to post certain property as security before the security agreement is formalized. A catchall term to connote all of the transactions which, despite peculiarities of form or appearance of nonsecured transaction, are given effect of mortgage when examined by court with equitable powers. Eagle's Nest, Inc. v. Malt, 70 N.C.App. 397, 319 S.E.2d 685, 687.For example, if a person transfers property by deed absolute to his creditor as security for a debt with the mutual understanding that such property will be reconveyed by the creditor on the repayment of the debt, a court will consider such a deed a mortgage, though an innocent purchaser value from the creditor can cut off the equitable rights of the debtor.See also mortgage@ FHA mortgageOne in which the loan has been insured in whole or in part by the Federal Housing Administration.@ first mortgageThe first (in time or right) of a series of two or more mortgages covering the same property and successively attaching as liens upon it.Also, in a more particular sense, a mortgage which is a first lien on the property, not only as against other mortgages, but as against any other charges or incumbrances.Also called "senior mortgage".+ first mortgageThe senior mortgage which, by reason of its position, has priority over all junior encumbrances. The holder of the first or senior mortgage has priority right to payment on default.See also mortgage@ first mortgage bondsBonds the payment of which is secured by a first mortgage on property.@ fixed-rate mortgageSuch mortgage specifies an interest rate that remains fixed for the life of the mortgage regardless of market conditionsCompare adjustable rate mortgage.@ future advances mortgageA term used to describe a present mortgage transaction where part of the loan proceeds will not be paid out until a future date.@ general mortgageMortgages are sometimes classified as general and special, a mortgage of the former class being one which binds all property, present and future, of the debtor (sometimes called a "blanket" mortgage); while a special mortgage is limited to certain particular and specified property.@ graduated payment adjustable rate mortgage(GPARM).A mortgage format that combines the features of the graduated payment mortgage (GPM) and the adjustable rate mortgage (ARM).@ graduated payment mortgage(GPM)A mortgage loan that carries monthly payments which increase annually by a specified percentage during the early years of the loan and then remain constant thereafter.See also adjustable rate mortgage.@ growing equity mortgage(GEM).A mortgage loan that is fully amortized over a significantly shorter term than the traditional 25 or 30 year mortgage, and which may have payments which increase each year. Joint mortgage. One which is given to or by two or more mortgagees jointly.@ judicial mortgageIn the law of Louisiana, the lien resulting from judgments, whether rendered on contested cases or by default, whether final or provisional, in favor of the person obtaining them. Civ.Code La. art. 3321.@ junior mortgageOne which ranks below another mortgage of the same property in the value of the security, and is subordinate to senior mortgages in its rights.+ junior mortgageA mortgage which is subordinate to another mortgage, called the priority, prior, or senior mortgage.See also mortgage@ leasehold mortgageMortgage secured by lessee's interest in leased property.@ legal mortgageA term used in Louisiana. The law alone in certain cases gives to the creditor a mortgage on the property of his debtor, without it being requisite that the parties should stipulate it. That is called "legal mortgage." It is also called a tacit mortgage, because it is established by the law without the aid of any agreement. Civ.Code La. art. 3311@ mortgage of goodsSee chattel mortgage.@ open-end mortgageA mortgage permitting the mortgagor to borrow additional money under the same mortgage, with certain conditions, usually as to the assets of the mortgagor.+ open-end mortgageA mortgage that allows the borrowing of additional sums, usually providing that at least the stated ratio of assets to the debt must be maintained. A mortgage which provides for future advances on the given mortgage and increases the amount of the existing mortgage@ package mortgageA package mortgage is used to include not only the real property but many items of personal property incident to the real property, such as stoves, refrigerators, and the like.@ purchase money mortgageGenerally, any mortgage given to secure a loan made for the purpose of acquiring the land on which the mortgage is given; more particularly, a mortgage given to the seller of land to secure payment of a portion of the purchase price. A mortgage given, concurrently with a conveyance of land, by the vendee to the vendor, on the same land, to secure the unpaid balance of the purchase price.+ purchase money mortgageA mortgage or security device taken back to secure the performance of an obligation incurred in the purchase of the property. A "purchase money" security interest for personal property is controlled by Article 9 of the Uniform Commercial Code.See also mortgage- purchase money security interest@ reverse annuity mortgage(RAM).A mortgage format under which the mortgage loan proceeds are disbursed periodically over a long time period to provide regular income for the borrower-mortgagor. The loan will usually be repaid in a lump sum when the mortgagor dies or the property is sold.@ second mortgageOne which takes rank immediately after a first mortgage on the same property, without any intervening liens, and is next entitled to satisfaction out of the proceeds of the property.Properly speaking, however, the term designates the second of a series of mortgages, not necessarily the second lien. For instance, the lien of a judgment might intervene between the first and second mortgages; in which case, the second mortgage would be the third lien.Also called "junior mortgage".+ second mortgageA mortgage on property which ranks in priority below a first mortgage. In title states, it is the transfer of the mortgagor's equity of redemption to secure a debtSee also wraparound mortgage.@ senior mortgageOne which ranks ahead of another mortgage in terms of rights in the security.See also first mortgage.+ senior mortgageA mortgage which is of superior priority over others; above those which are often referred to as junior mortgagesCompare junior mortgage@ shared appreciation mortgage(SAM).A mortgage format that gives the lender the right to recover, as "contingent interest", some agreed-upon percentage of the property's appreciation in value measured when it is sold or at some other future fixed date.@ shared-equity mortgage(SEM).A mortgage format under which a purchaser-occupant and another person (often a relative) become co-owners and co-mortgagors of real estate. Usually the non-occupant owner pays all or a substantial part of the monthly payments and is entitled to share in any appreciation when the real estate is sold.@ straight mortgageOne in which the mortgagor is obligated to pay interest during the term of the mortgage and a final payment of principal at the end of the term in contrast to an amortized mortgage.@- tacit mortgage (See also legal mortgage_@ VA MortgageHome mortgage loan provided to veterans and their spouses which is guaranteed by the Veterans Administration.@ variable rate mortgageA long-term mortgage contract which includes a provision permitting the lending institution to adjust, upward and downward, the contract's interest rate in response to changes in money market rates and the conditions of demand for mortgages.@
Black's law dictionary. HENRY CAMPBELL BLACK, M. A.. 1990.