(A) A loan to purchase real estate where the borrower places the title to real estate as collateral (the security) for the loan, which the lender can foreclose upon if the borrower does not pay back the loan in a timely fashion. After the foreclosure process, the real estate may be sold to pay off the loan. (B) contracts, conveyancing. Mortgages are of several kinds: as the concern the kind of property, mortgaged, they are mortgages of lands, tenements, and, hereditaments, or of goods and chattels; as they affect the title of the thing mortgaged, they are legal and equitable. 2. In equity all kinds of property; real or personal, which are capable of an absolute sale, may be the subject of a mortgage; rights in remainder and reversion, franchises, and choses in action, may, therefore, be mortgaged; But a mere possibility or expectancy, as that of an heir, cannot. 3. A legal mortgage of lands may be described to be a conveyance of lands, by a debtor to his creditor, as a pledge and security for the repayment of a sum of money borrowed, or performance of a covenant; 1 Watts, R. 140; with a proviso, that such conveyance shall be void on payment of the money and interest on a certain day, or the performance of such covenant by the time appointed, by which the conveyance of the land becomes absolute at law, yet the, mortgagor has an equity of redemption, that is, a right in equity on the performance of the agreement within a reasonable time, to call for a re-conveyance of the land. 4. It is an universal rule in equity that once a mortgage, always a mortgage; every attempt, therefore, to defeat the equity of redemption, must fail. See Equity of Redemption. 5. As to the form, such a mortgage must be in writing, when it is intended to convey the legal title. It is either in one single deed which contains the whole contract and which is the usual form or, it is two separate instruments, the one containing an absolute conveyance, and the other a defeasance. But it may be observed in general, that whatever clauses or covenants there are in a conveyance, though they seem to import an absolute disposition or conditional purchase, yet if, upon the whole, it appears to have been the intention of the parties that such conveyance should be a mortgage only, or pass an estate redeemable, a court of equity will always so construe it. 6. As the money borrowed on mortgage is seldom paid on the day appointed, mortgages have now become entirely subject to the court of chancery, where it is an established rule that the mortgagee holds the estate merely as a pledge or security for the repayment of his money; therefore a mortgage is considered in equity as personal estate. 7. The mortgagor is held to be the real owner of the land, the debt being considered the principal, and the land the accessory; whenever the debt is discharged, the interest of the mortgagee in the lands determines of course, and he is looked on in equity as a trustee for the mortgagor. 8. An equitable mortgage of lands is one where the mortgagor does not convey regularly the land, but does some act by which he manifests his determination to bind the same for the security of a debt he owes. An agreement in writing to transfer an estate as a security for the repayment of a sum of money borrowed, or even a deposit of title deeds, and a verbal agreement, will have the same effect of creating an equitable mortgage.
Law Dictionary – Alternative Legal Definition
An estate created by a conveyance absolute in its form, but intended to secure the performance of some act, such as the payment of money, and the like, by the grantor or some other person, and to become void if the act is performed agreeably to the terms prescribed at the time of making such conveyance. 1 Washb. Real Prop. 475.
A conditional conveyance of land, designed as a security for the payment of money, the fulfillment of some contract or the performance of some act, and to be void upon such payment, fulfillment or performance. A debt by specialty, secured by a pledge of lands, of which the legal ownership is vested in the creditor, but of which, in equity, the debtor and those claiming under him remain the actual owners, until debarred by judicial sentence or their own laches. Coote, Mortg. 1. The foregoing definitions are applicable to the common law conception of a mortgage. But in many states in modern times, it iB regarded as a mere lien, and not as creating a title or estate. It is a pledge or security of particular property for the payment of a debt pr the performance of some other obligation, whatever form the transaction may take, but is not now regarded as a conveyance in effect, though It may be cast in the form of a conveyance. To the same purport are also the following statutory definitions:
Mortgage is a right granted to the creditor over the property of the debtor for the security of his debt, and gives him the power of having the property seized and sold in default of payment Civ. Code La. art 3278.
Mortgage is a contract by which specific property is hypothecated for the performance of an act, without the necessity of a change of possession. Civ. Code Cal. 1.2920. Chattel mortgage. A mortgage of goods, chattels, or personal property. See CHATTEL MORTGAGE. Conventional mortgage. The conventional mortgage is a contract by which a person binds the whole of his property, or a portion of it only, in favor of another, to secure the execution of some engagement, but without divesting himself of possession. Civ. Code La. art. 3290; Succession of Benjamin, 39 La. Ann. 612, 2 South. 187. It is distinguished from the “legal” mortgage, which is a privilege which the law alone in certain cases gives to a creditor over the property of his debtor, without stipulation of the parties. This last is very much like a general lien at common law, created by the law rather than by the act of the parties, such as a judgment lien. Equitable mortgage. A specific lien upon real property to secure the payment of money or the performance of some other obligation, which a court of equity will recognize and enforce, in accordance with the clearly ascertained intent of the parties to that effect, but which lacks the essential features of a legal mortgage, either because it grows out of the transactions of the parties without any deed or express contract to give a lien, or because the instrument used for that purpose is wanting in some of the characteristics of a common law mortgage, or, being absolute in form, is accompanied by a collateral reservation of a right to redeem, or because an explicit agreement to give a mortgage has not been carried into effect. In English law, the following mortgages are equitable: (1) Where the subject of a mortgage is trust property, which security is effected either by a formal deed or a written memorandum, notice being given to the trustees in order to preserve the priority. (2) Where it isan equity of redemption, which is merely a right to bring an action in the chancery division to redeem the estate. (3) Where there is a written agreement only to make a mortgage, which creates an equitable lien on the land. (4) Where a debtor deposits the title-deeds of his estate with his creditor or some person on his behalf, without even a verbal communication. The deposit itself is deemed evidence of an executed agreement or contract for a mortgage for such estate. Wharton. First mortgage. The first (in time or right) of a series of two or more mortgages covering the same property and successively attaching as liens upon it; also, in a more particular sense, a mortgage which is a first lien on the property, not only as against other mortgages, but aa against any other charges or incumbrances. Green’s Appeal, 97 Pa. 347. First mortgage bonds. Bonds the payment of which is secured by a first mortgage on property. Second mortgage. One which takes rank immediately after a’first mortgage on the same property, without any intervening liens, and is next entitled to satisfaction out of the proceeds of the property. Green’s Appeal, 97 Pa. 347. Properly speaking, however, the term designates the second of a series of mortgages, not necessarily the second lien. For instance, the lien of a judgment might intervene between the first and second mortgages; in which case, the second mortgage would be the third lien. General mortgage. Mortgages are sometimes classified as general and special, a mortgage of the former class being one which binds all property, present and future, of the debtor (sometimes called a “blanket” mortgage); while a special mortgage is limited to certain particular and specified property. Barnard v. Erwin, 2 Rob. (La.) 415. Judicial mortgage. In the law of Louisiana. The lien resulting from judgments, whether rendered on contested cases or by default, whether final or provisional, in favor of the person obtaining them. Civ. Code La. art. 3321. Legal mortgage. A term used in Louisiana. The law alone in certain cases gives to the creditor a mortgage on the property of his debtor, without it being requisite that the parties should stipulate it. This is called “legal mortgage.” Civ. Code La. art. 3311. Mortgage of goods. A conveyance of goods in gage or mortgage by which tile whole legal title passes conditionally to the mortgagee; and, if the goods are not redeemed at the time stipulated, the title becomes absolute in law, although equity will interfereto compel a redemption. It is distinguished from a “pledge” by the circumstance that possession by the mortgagee is not or may not be essential to create or to support the title. Story, Bailm. s 287. See CHATTEL MORTGAGE. Purchase-money mortgage. A mortgage given, concurrently with a conveyance of land, by the vendee to the vendor, on the same land, to secure the unpaid balance of the purchase price. See Baker v. Clepper, 26 Tex. 629, 84 Am. Dec. 591. Tacit mortgage. In Louisiana. The same as a “legal mortgage.” See supra. Welsh mortgage. In English law. A species of security which partakes of the nature of a mortgage, as there is a debt due, and an estate is given as security for the repayment, but difrers from it in the circumstances that the rents and profits are to be received without account till the principal money is paid off, and there is no remedy to enforce payment, while the mortgagor has a perpetual power of redemption. It is now rarely used.