Also known as: mortgage markets
Written by attorneys · grounded in primary & secondary sources — see below
The national market in which mortgage loans are originated by lenders to borrowers. It also encompasses the secondary market in which existing mortgages and their associated obligations are transferred from one holder to another.
Harborview Development borrowed from Seaside Life Insurance and gave a mortgage on its project to secure the note. Seaside later assigned the note to Skyline Capital and the mortgage instrument to Bayfront Realty in separate documents. When Harborview defaulted, Skyline enforced the obligation and foreclosed because the mortgage followed the note to the same hands in the secondary mortgage market.
The subprime mortgage market collapse wiped out household wealth and triggered widespread defaults. Congress responded by creating an agency to oversee consumer financial products. The agency’s structure later faced constitutional challenge in litigation over its single-director leadership.
Select any source to read its text and confirm it supports the definition.
The primary market is where lenders originate new mortgage loans to borrowers. The secondary market is where those existing mortgages and obligations are transferred from one holder to another.
Supporting sources
Separating the right to enforce the obligation from the mortgage renders the note unsecured as a practical matter. This outcome produces economic waste and gives the borrower an unwarranted windfall, so the law presumes the mortgage follows the note unless the parties clearly agree otherwise.
Supporting sources
No. Standing to foreclose turns on who holds the enforceable right to the debt. Transfer of the note carries the mortgage with it even if the mortgage assignment is not recorded or is made to a servicer.
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Absent clear evidence that the parties intended to disassociate them, the mortgage follows the note. The holder of the note therefore obtains the right to enforce both the obligation and the security interest.
Supporting sources
…Product Safety Commission. Ibid. That proposal soon met its moment. Within months of Professor Warren’s writing, the subprime mortgage market collapsed, precipitating a financial crisis that wiped out over $10 trillion in American household wealth and cost millions of Americans their jobs, their retirements, and their homes. In…