n. a document in which the owner pledges his/her/its title to real property to a lender as security for a loan described in a promissory note. Mortgage is an old English term derived from two French words "mort" and "gage" meaning "dead pledge." To be enforceable the mortgage must be signed by the owner (borrower), acknowledged before a notary public, and recorded with the County Recorder or Recorder of Deeds. If the owner (mortgagor) fails to make payments on the promissory note (becomes delinquent) then the lender (mortgagee) can foreclose on the mortgage to force a sale of the real property to obtain payment from the proceeds, or obtain the property itself at a sheriff's sale upon foreclosure. However, catching up on delinquent payments and paying costs of foreclosure ("curing the default") can save the property. In some states the property can be redeemed by such payment even after foreclosure. Upon payment in full the mortgagee (lender) is required to execute a "satisfaction of mortgage" (sometimes called a "discharge of mortgage") and record it to clear the title to the property. A purchase-money mortgage is one given by a purchaser to a seller of real property as partial payment. A mortgagor may sell the property either "subject to a mortgage" in which the property is still security and the seller is still liable for payment, or the buyer "assumes the mortgage" and becomes personally responsible for payment of the loan. Under English common law a mortgage was an actual transfer of title to the lender, with the borrower having the right to occupy the property while it was in effect, but non-payment ended the right of occupation.
Can I Afford a Mortgage?
An FHA Loan can help you afford a Mortgage:
The Economic Stimulus Act of 2008, or the stimulus package, increased loan limits for the Federal Housing Authority (FHA) Single-Family Program. The new law raises FHA's loan limit ( the dollar amount of a mortgage that FHA can insure ) for its single-family program from 87% of the conforming loan amount to as high as 175% (effectively $362,790 to $729,750) in certain geographic regions where the cost of housing is very high.
In less expensive markets, the increase is from 48% to 65% (effectively $200,160 to $271,050) of the conforming loan limit. FHA would also have the authority to raise those loan limits by up to an additional $100,000 if market conditions warrant such increases. This change expires on December 31, 2008.
FHA loan features include:
- Low down payment requirements
- Flexible income, debt, and credit requirements to help borrowers qualify
- Down payment and closing costs that may be funded by a gift, grant or secured loan
For conforming loans, the increased amounts selectively apply to approximately 20 or more clearly defined Metropolitan Statistical Areas (MSAs). For FHA loans, more communities are positively affected as FHA loan limits were previously significantly lower than the conforming loan limits. For both conforming and FHA loans, the limits are based upon a percentage of median area home prices. This stimulus package, including an increase in conforming and FHA loan limits, is helpful to both the economy and consumers.
Specific county limits for FHA can be found below:
For example, the FHA loan limits for Brooklyn, NY are as follow
Mortgage maximums as of Wednesday February 25, 2009
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The FHA secure program
Owning a home has always been at the center of the American Dream. For many homeowners, however, that dream is threatened by foreclosure. An estimated 240,000 families can avoid foreclosure by refinancing their mortgages using the new FHA Secure plan. FHA will allow families with strong credit histories who had been making timely mortgage payments before their loans reset-but are now in default-to qualify for refinancing.
WHAT IS FHA Secure
FHA Secure is a refinancing option that gives homeowners with non-FHA adjustable rate mortgages (ARMs), current or delinquent and regardless of reset status, the ability to refinance into a FHA-insured mortgage. With FHA Secure, the lender will not automatically disqualify you because you are delinquent on your loan, and the lender may offer you a second mortgage to make up the difference between the value of your property and what you owe.
WHO IS ELIGIBLE
So long as you are current on your mortgage and have sufficient income to make the mortgage payment, you are eligible for an FHA Secure refinance. If you are delinquent, the default must have been due to the payment shock of an interest rate reset or, in the case of an Option ARM, the "recasting" of the mortgage to fully amortizing.
By refinancing into a FHA-insured mortgage, you can expect to pay lower monthly mortgage payments. FHA Secure can improve the quality of life for many communities by helping to reduce the number of mortgage defaults and bringing greater stability to local housing markets.