Posted on: 17th Apr, 2010 10:19 am
A first mortgage for a new house was created and is called "Mortgage for use with Secured Revolving Credit Agreement"
On a new mortgage that was created along with a relvolving line of credit secured with the mortgage, it states "Grant of Mortgage" it then defines it as follows:
Grantor (who in this case is the buyer of the property who is taking out the mortgage and loan) mortgages to Lender all of Grantor's right, title and interest in and to the following described Real Property.
In addition Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents.
Does this mean that the Grantor (borrower) is giving up rights to the property to secure the loan? Meaning that they are making it a secured loan in that if they default the lender has first choice at filing a claim and seizing the property?
I'm trying to determine if it means the following:
Basically if Grantor (borrower) is a joint couple and one defaults, the other borrower cannot make a claim against the coborrower, as they gave up rights and interest to the bank? therefore it is the banks right to make the claim not the co-borrower? And because the loan became a secured loan attached to the mortgage, the bank would likely sieze the property, not go after personal assets?
On a new mortgage that was created along with a relvolving line of credit secured with the mortgage, it states "Grant of Mortgage" it then defines it as follows:
Grantor (who in this case is the buyer of the property who is taking out the mortgage and loan) mortgages to Lender all of Grantor's right, title and interest in and to the following described Real Property.
In addition Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents.
Does this mean that the Grantor (borrower) is giving up rights to the property to secure the loan? Meaning that they are making it a secured loan in that if they default the lender has first choice at filing a claim and seizing the property?
I'm trying to determine if it means the following:
Basically if Grantor (borrower) is a joint couple and one defaults, the other borrower cannot make a claim against the coborrower, as they gave up rights and interest to the bank? therefore it is the banks right to make the claim not the co-borrower? And because the loan became a secured loan attached to the mortgage, the bank would likely sieze the property, not go after personal assets?
3, you are essentially right in your analysis. a mortgage on property assures a lender that its rights are protected in the event of default. if, as you noted, it's a jointly-held property and one party walks away from the obligation, the other party is responsible to pick up the gauntlet and continue to make payments; else the lender files a notice of foreclosure and moves forward from there.
it's not so much a giving up of rights but an assignment of specific rights that allows the lender to do what it must do to protect its investment.
it's not so much a giving up of rights but an assignment of specific rights that allows the lender to do what it must do to protect its investment.
Thanks for responding. I understand that much, as a mortgage is attached to a property. What I'm trying to better understand is the difference between a traditional mortgage, and a mortgage created with an equity line of credit where the mortgage secures the equity line and is secured to the credit agreement.
For example, borrower needs a large loan for a new mortgage. In order to be able to qualify for the mortgage the bank creates a private equity line of credit in the amount of the mortgage they create. They then secure the line of credit with the mortgage. The mortgage is called "Mortgage created with secured revolving credit agreement". Then in mortgage doc it calls borrowers Grantor, and has that statement. Have they given up rights to the bank to secure the loan? Can one borrower make a claim against the other, or would the claim have to come from the bank? Did the co-borrower protect themselves from claims by creating the secured loan?
For example, borrower needs a large loan for a new mortgage. In order to be able to qualify for the mortgage the bank creates a private equity line of credit in the amount of the mortgage they create. They then secure the line of credit with the mortgage. The mortgage is called "Mortgage created with secured revolving credit agreement". Then in mortgage doc it calls borrowers Grantor, and has that statement. Have they given up rights to the bank to secure the loan? Can one borrower make a claim against the other, or would the claim have to come from the bank? Did the co-borrower protect themselves from claims by creating the secured loan?
Thanks for responding. I understand that much, as a mortgage is attached to a property. What I'm trying to better understand is the difference between a traditional mortgage, and a mortgage created with an equity line of credit where the mortgage secures the equity line and is secured to the credit agreement.
For example, borrower needs a large loan for a new mortgage. In order to be able to qualify for the mortgage the bank creates a private equity line of credit in the amount of the mortgage they create. They then secure the line of credit with the mortgage. The mortgage is called "Mortgage created with secured revolving credit agreement". Then in mortgage doc it calls borrowers Grantor, and has that statement. Have they given up rights to the bank to secure the loan? Can one borrower make a claim against the other, or would the claim have to come from the bank? Did the co-borrower protect themselves from claims by creating the secured loan?
For example, borrower needs a large loan for a new mortgage. In order to be able to qualify for the mortgage the bank creates a private equity line of credit in the amount of the mortgage they create. They then secure the line of credit with the mortgage. The mortgage is called "Mortgage created with secured revolving credit agreement". Then in mortgage doc it calls borrowers Grantor, and has that statement. Have they given up rights to the bank to secure the loan? Can one borrower make a claim against the other, or would the claim have to come from the bank? Did the co-borrower protect themselves from claims by creating the secured loan?
a mortgage is a mortgage, in essence. if you obtain a "traditional" first mortgage loan, you'll provide a mortgage deed for the lender. if, on the other hand, you obtain a home equity line of credit as your first mortgage, you'll still provide a mortgage deed, but it will need to be written differently from the "traditional" deed due to the nature of the loan terms.
in either case, borrowers can seek protection against each other by going to court with their grievance, whatever it may be. that doesn't alleviate any of the lender's interest in the property, of course; and it doesn't necessarily mean that one borrower would be favored over the other by the court. it's a matter of presenting the grievance and seeking penance or some sort of relief.
no rights are given up other than would be given up under any mortgage scenario.
i may have gone off on a tangent, but i hope i've covered the ground you were alluding to.
in either case, borrowers can seek protection against each other by going to court with their grievance, whatever it may be. that doesn't alleviate any of the lender's interest in the property, of course; and it doesn't necessarily mean that one borrower would be favored over the other by the court. it's a matter of presenting the grievance and seeking penance or some sort of relief.
no rights are given up other than would be given up under any mortgage scenario.
i may have gone off on a tangent, but i hope i've covered the ground you were alluding to.
A grant of mortgage basically just means that the lender generated a mortgage that is using the home's equity to pay for the loan. It is kind of like using the house as its own collateral. It grants the lender different rights should the buyer default, but it still allows the bank to foreclose should the buyer stop paying their financial obligation back in full. While the term is slightly different, it is not a foreign concept. With this and any type of loan agreement you should continue to
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