In law, the word mortgage technically means a pledge of real estate by a borrower to a lender as security for a debt. A mortgage instrument has two parts, this pledge as well as the promissory note to repay the debt. The two parties to a mortgage are the borrower, called the mortgagor, and the lender, called the mortgagee. A mortgage is generally publicly recorded in the county where the property is located, creating an encumbrance on the title called a lien. The word mortgage is more commonly used to mean any loan for real estate. Terms reflecting this usage include conventional mortgage, adjustable rate mortgage (ARM), and mortgage-backed security. The Federal Reserve tracks the volume of US mortgage debt outstanding in its flow of funds reports. The word mortgage has a particularly interesting etymology. Mort comes from the Latin verb meaning to die, and gage comes from and Old German word for pledge. At one time, a mortgage was indeed a death pledge! |
