Mortgagor Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Mortgagor, written in plain English, along with examples of how it is used.
What is Mortgagor?
(n) Mortgagor is the person who pledges a property or title to a property as a security for the loan taken by him from the mortgagee. The Law requires registration of the mortgage. mortgagor loss his right on the property when he fails to close the loan .
History and Meaning of Mortgagor
Mortgagor is a legal term that refers to the borrower who pledges his property or title to secure a loan from a lender, known as the mortgagee. This type of transaction is commonly known as a mortgage, and the borrower's pledge is called a mortgage security. The term mortgagor has been in use since the 17th century and is derived from the Latin word mortuus, which means “dead,” and the word gage, meaning “pledge.”
The mortgagor holds on to the property and is allowed to use it, but if the borrower fails to repay the loan, the mortgagee can claim ownership of the property. Mortgages have played a crucial role in the growth of the modern economy by providing individuals and businesses with capital to invest in real estate.
Examples of Mortgagor
Here are a few examples of how the term mortgagor is used in different contexts:
- John obtained a mortgage from Bank of America to buy a new house. In this scenario, John is the mortgagor and Bank of America is the mortgagee.
- The mortgagor was unable to pay the monthly payments, so the mortgagee initiated foreclosure proceedings.
- The mortgagor sold the property to a new owner, but the mortgage remained in place, and the new owner became responsible for paying off the debt.
- The mortgagor has the right to prepay the loan but may have to pay a penalty for doing so.
Legal Terms Similar to Mortgagor
Here are some related legal terms that are similar to mortgagor:
- Mortgagee: The lender who provides the funds to the mortgagor.
- Mortgage Security: The property or asset pledged as collateral for the loan.
- Foreclosure: The legal process by which the mortgagee can gain ownership of the property if the mortgagor fails to repay the loan.
- Redemption Period: A period of time after the foreclosure sale during which the mortgagor has the right to buy back the property by paying the outstanding debt.