Mortgage is a document in which the owner guarantees a
title to real estate to a lender as security for a loan described in
a promissory note. 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 fails to
make payments on the promissory note then the lender can foreclose
on the mortgage to force a sale of the real estate to obtain payment
from the proceeds, or obtain the property itself at a sheriff's sale
upon foreclosure.
A purchase-money mortgage is one given by a purchaser to a seller of real estate
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. California
is one of 14 states that use a "deed of trust" as a mortgage, in which
the title is technically given to a trustee to hold for a beneficiary.
