While the theory as to exactly what a mortgage is varies among states in the Union, a mortgage is for all practical purposes a promise on the part of a property owner to pay with interest a certain total sum in periodic payments over a given number of years to a person who lent him this sum of money. If the payer (mortgagor) does not meet the payments to the one who lent the money (mortgagee) the mortgagee can have the property taken away from the mort gagor, sold and pay himself what he is owed.

It is hardly necessary to belabor the point as to exactly what the legal defini tion of a mortgage is. The vast majority of home owners in the United States have a mortgage on their homes and are only too familiar with the fact that a mortgage is what they owe on the home and that if they do not meet their pay ments they will lose their homes.

The leading and most conservative financial institutions in the country invest in mortgages commercial banks, savings banks, insurance companies, building and loan associations, pension funds, union funds and trust funds. There is a serious question as to whether we could have such a thing as life insurance as we know it in the United States if the insurance companies were not able to place their funds in mortgages which provide income on which to operate these companies. If mortgages were suddenly wiped out overnight so would building and loan associations, in all probability, since their major assets would disappear. Investment - Read More.