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Definition of 'Mortgagee'

A mortgagee is a lender who provides a mortgage loan to a borrower. The borrower agrees to repay the loan over a period of time, typically 15 to 30 years, with interest. The mortgagee holds a lien on the property that secures the loan. This means that if the borrower defaults on the loan, the mortgagee can foreclose on the property and sell it to recoup their losses.

There are two types of mortgagees: primary mortgagees and secondary mortgagees. Primary mortgagees are the lenders who make the initial loan to the borrower. Secondary mortgagees are investors who buy mortgage loans from primary mortgagees. Secondary mortgagees typically package mortgage loans into securities and sell them to investors.

Mortgagees have a number of rights and responsibilities. They have the right to receive regular payments of principal and interest from the borrower. They also have the right to foreclose on the property if the borrower defaults on the loan. Mortgagees have a responsibility to ensure that the borrower is qualified to receive the loan and that the property is suitable for collateral. They also have a responsibility to service the loan, which includes collecting payments from the borrower and handling any escrow accounts.

Mortgagees are an important part of the mortgage lending process. They provide the capital that borrowers need to purchase homes and other real estate. They also help to ensure that the mortgage market is stable and efficient.

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