There are many misconceptions about mortgages which I hope this article will put right. The worst thing to call one is a mortgage home loan and while this expression is in common usage, it is totally incorrect. The mortgagor is the person who owes money to the mortgagee (the person who finances the deal) using a legal contract called a mortgage. Actually, it is in fact a legal document that is designed to ensure the lenders financial interests are secure. Without mortgages being available, people and many businesses would not be able to afford the full asking price of a property if it was required they pay this amount upfront. Although this article is brief, below are points that will help more in the understanding of how this system operates. The problem arises because so many people refer to the buyer as the Borrower and the financier as The Lender which leads people to believe that the money has been loaned which is not the case. A lien is a means by which the mortgagor can purchase a home but it is the mortgagee that retains legal ownership until the arrangement between them has been completed (the debt is paid off). The property you are buying does in fact become collateral for the finance that has been sought to pay for it and is the protection a mortgagee needs if he is going to continue financing house purchases. The lien (document) is normally recorded at the local courthouse in the public records section. The lien stays in force while the debt remains but the property is actually owned by the mortgagor. This situation may seem strange but in essence what it means is that the property is owned completely by the mortgagor and not the mortgagee who also does not have the title. The only right that your mortgage gives to the mortgagee over your property is to sell it to recover funds in the case that you do not pay off your debt. If in the unfortunate event this happens, the process whereby the funds are reclaimed is called foreclosure. This is done in order for it to be considered legal; this type of foreclosure is referred to as a judicial foreclosure. This is only a short introduction as the subject is much more complex but this information should make this important issue much clearer. John Andrews/Steven are the owners of the (http://noforeclosure.nocreditcrunch.com/) No Foreclosure site. Sign up now for their newsletter and find out the amazing insider secrets on how to save your home from being foreclosed on if you do have a mortgage. Do not let it become too late before acting on it.