A History Of Mortgages

If you own a home, then likely you also have a mortgage. Many people who have a great deal of debt are on the prowl for solutions to their debt problems. These people, when they request information about loans, consolidations, refinances, or reverse mortgages are what those in the finance business call mortgage leads. If you are a loan originator, a mortgage loan officer or a mortgage broker, then you know the great value that comes from using internet mortgage leads. They save you time in developing relationships with interested people, and the more interested individuals to whom you can speak, the more deals you will close and the more money you will make. It all comes down to the mortgage you can offer this potential client.

The word "mortgage" is a term derived from French law, which means "dead pledge." In essence, the debt incurred from the clients' mortgages was absolute. Of course, today's mortgages come in shorter terms if that is what a client desires. It is a legal means for a purchaser to secure a property, and it also refers to the mortgage loan, or the debt that the mortgage secures.

Originally, a mortgage was a deal that was struck between a land owner and someone who wanted to purchase the property. The mortgage placed certain conditions on the deal, and it would annul the deal if the conditions were not met. Historically speaking, the person who agreed to the mortgage would be responsible to make sure that the land produced a crop or livestock that would then be sold to make the money to pay off the debt to the land owner. Frighteningly, if the land could not produce livestock or a successful crop, the mortgage debt still would remain in effect.

In the early forms of a mortgage, the land owner had all the power. This person could sell the land or refuse to continue the relationship to the borrower whenever he wanted to, and the borrower had no recourse, at least at first. This led to borrowers finally being given the right in court to be the absolute owner of the property after they had paid it off in full. This was called "equity of redemption."

This step into a legal determining of the rights of the land owner and the borrower eventually led to the law being changed so that the land owner would keep ownership of the property, but the borrower had the right to take possession of the property, sell it if he wished or even put it up for foreclosure in order to make money to reimburse the mortgage. Borrowers today are still looking for all of the legal perks that come from having a mortgage.

By: Wayne Hemrick

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Wayne Hemrick has been in the real estate, property appraisal in the Phoenix area for 20 years. He has is own very successful real estate and mortgage lending business in the Phoenix area.