Mortgage bank
In search for new financial resources, mortgage banks in some countries started developing networks of agents. In this way, it became possible to collect everyday savings on a large scale and reinvest them in mortgages. By doing so, the traditional divide between savings banks and mortgage institutions gradually diminished. Apart from Scandinavia, most mortgage banks, including the British building societies, were not very active in agricultural credit [Mokyr, p. 1412]. A loan using a real asset, such as a house or other building, as collateral. If the interest and redemption payments are not made, the lender or mortgagee can foreclose on the collateral, taking it over and selling it to repay the loan. Mortgages for any period: of 20 or 25 years are not unusual. With a repayment mortgage, the principal is paid off gradually over the life of the mortgage [Black, Hashimzade, Myles, p. 235]. The mortgagee may sell the mortgaged property under a power of sale, appoint a receiver, or obtain a decree of foreclosure. Under the Law of Property Act 1925, the only valid legal mortgages are a lease subject to cesser on redemption and a deed expressed to be a charge by the legal mortgage. Only the charge by legal mortgage is permitted where land is registered, and any such charge must be registered as a registered disposition, or the mortgage will not take effect at common law [Law, p. 231]. Business uses of the mortgage include using property to secure a loan to start a business. Virtually any property may be mortgaged (though the land is the most common). Under the Law of Property Act (1925), which governs mortgage regulations in the UK, there are two types of mortgage-legal and equitable [Law, p. 227].
Black, J., Hashimzade, N., Myles, G. (2017). A Dictionary of Economics. Oxford: Oxford University Press.
Law, J. (2016). A Dictionary Business and Management (6 ed.) Oxford: Oxford University Press.
Law, J. (2022). A Dictionary of Law (10 ed.) Oxford: Oxford University Press.
Mokyr, J. (Ed.) (2003). The Oxford Encyclopedia of Economic History. Oxford: Oxford University Press.