Mortgages process in US

A mortgage is referred to the transfer of property to a lender as a security against a debt which is normally lending of money. Once the terms of the mortgage are satisfied or the loan/debt is refunded by the borrower, the interest in property is returned to the owner (borrower). Hence, mortgage is simply the security for the money given on loan to the borrower by the lender. In most of the cases mortgages are closely related to loans on real estate instead of other property like vehicles or ships. Mortgage loans are given on residential property as well as commercial ones.

Mainly two kinds of mortgages are used in the U.S. They are the mortgage or also known as mortgage deed and the deed of trust.

In most of the states the mortgage gives the right to sell the mortgaged property to the creditor or lender normally the bank when the borrower is not able to meet the obligations set out in the loan contract. For this, a judicial proceeding is required where the lender would declare that the debt is due and the borrower is in default and thereby order for sale of the mortgaged property to pay off the debt. The state of Georgia however has a different mortgage instrument called deed to secure debt. Here the title of the property goes to the lender even though the borrower is able to maintain an equitable ownership of the property and thereby enjoy the property provided he is in compliance with the loan obligations.

The second kind of mortgage is the deed of trust. Here the borrower gives away a deed to a trustee in order to secure a loan. In majority of the states, this deed will create a lien on the said property and does not involve transfer of title. It is possible to foreclose this deed of trust by the trustee through a non-judicial sale of the property.