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Operation of the mortgage

The borrower (also called the mortgagor) uses a mortgage to pledge real property to the lender (also called the mortgagee) as security against the debt (also called hypothecation) for the rest of the value of the property. In legal terms, the creation of a mortgage gives the ''legal title'' of the land to the mortgagee and an ''equitable title'' (called "equity of redemption") to the mortgagor. The legal title, however, only exists as a security for a debt and does not convey any title or powers associated with real property.
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Last Updated August 11, 2005