A mortgage, currently, is a device used to create a
lien on real estate by a contract.
At common law, a mortgage was a conveyance that on its face
was absolute and conveyed a fee simple estate, but which was
in fact conditional, and would be of no effect if certain
conditions were met --- usually, but not necessarily, the
payment of a debt by the original landowner. Hence the word
"mortgage," Law French for "dead pledge;"
that is, it was absolute in form and in theory required no
further steps to be taken by the creditor.
In many U. S. states, however, a mortgage has been converted
by statute to a device for creating a security interest in
land. When the landowner fails to perform on the obligation
secured by the mortgage, the mortgage holder must file a foreclosure
to cause the property to be sold at auction, usually by the
sheriff. Since mortgage debt is often the largest debt owed
by the debtor, banks and other mortgage lenders run title
searches of the real property to make certain that the lien
of the mortgage is prior to anyone else's claim.
Mortgage lending is a major category of the business of finance
in the United States of America. Mortgages are commercial
paper and can be conveyed and assigned freely to other holders.
In the USA the Home Owners Loan Corporation, the Federal Housing
Administration administer the programs colloquially known
as "Ginnie Mae" and "Freddie Mac" to foster
mortgage lending and thus to encourage home ownership and