Participants in Mortgage

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The creditor, who is better known as the mortgage lender and the borrower of the mortgage are the main participants in mortgage. Sometimes the mortgage broker acts as the middle man between the mortgage borrower and the mortgage lender.

The borrower of the mortgage is the person who borrows liquid cash against a security pledged for repayment of a loan. The security in case of home mortgage is house of the borrower, sometimes land may also be used as the collateral. The borrower is exclusively responsible to conform to the terms and conditions of the mortgage and the other requisites of the loan.

In the event the borrower fails to pay off the mortgage amount, the usual procedure followed to recover the loan amount involves foreclosure of the mortgage by the mortgage lender. The participants in mortgage, under the group of borrowers, mainly include landlords, small and medium scale business owners, who usually use their offices or manufacturing units as security for the repayment of loan, however, the most prominent mortgage borrowers are the house owners.

Mortgage fraud are common now a days which necessitate the entry of legal advisors for legal representations, to sort out complications arising out of the mortgage. The legal advisors are mainly required for dealing with cases of foreclosure of the mortgage by the lender of the mortgage. Foreclosure is the judicial procedure wherein the financial institution like the bank, cooperative societies or the secured creditors etc. who have acted as the respective mortgage lender seizes, sells or even take away the ownership of the collateral from the borrower. Foreclose are mainly are classified into two kinds, the first kind is known as foreclosure by judicial sale and the second kind is known as foreclosure by power of sale. Other kinds of foreclosure have also been incorporated but they are rarely used for legal proceedings, strict foreclosure is one such foreclosure procedure.

The participants in mortgage, mortgage broker help the borrowers of mortgage with all kind of information regarding the kinds of mortgage available in the market, names of the financial institutions as well as secured creditors, who act as mortgage lenders, rates of interest prevailing in the market, tenure of mortgages available, other terms and condition of the mortgages and the different repayment procedures. The mortgage brokers are solely responsible for their suggestions regarding the suitability of the mortgage plan to the borrower and in case any mismatch arises later the mortgage borrower will be answerable to the borrower and have to face serious financial consequences. The mortgage borrower has to secure the mortgage lenders approval for the specific mortgage, collect information of the credit history and document of the client etc. are the other functions of the mortgage broker4.

The other participant in mortgage is the mortgage lender who are mainly financial institutions like banks in the public sector and in the private sector, involved in providing loans against the property of the borrower. In India the prominent financial institutions that have gained prominence as mortgage lenders are the State government of India, Citibank, HDFC, HSBC and ICICI and so on.

Last Updated on 5/26/2011