The mortgagee is the lender: the party a mortgage is given to as security for a debt. The mortgagor is the borrower who gives it. If you sold a property and financed the sale yourself with a mortgage, you are the mortgagee.
Mortgagee and mortgagor: which is which
In legal English the “-or” does the giving and the “-ee” does the receiving, so the borrower, who gives the mortgage, is the mortgagor, and the lender who receives it is the mortgagee.
| Term | Who it is | What they do |
|---|---|---|
| Mortgagor | The borrower, also called the payer | Owns the property, makes the payments and pledges the property as security |
| Mortgagee | The lender, or the note holder | Receives the payments and holds the lien until the debt is paid |
In everyday speech the borrower “gets a mortgage” from the lender. What the borrower gets is a loan, while the mortgage runs the other way, from borrower to lender, as the lender’s protection.
What the mortgagee holds
A mortgagee holds a pair of documents that work together. The note is the payer’s written promise to repay, stating the amount, the rate and the schedule. The mortgage is the recorded document that makes the property security for that promise, and it creates a lien, a legal claim against the property.
The house belongs to the payer, and the mortgagee owns the right to be paid along with the right to enforce the lien if the payer does not keep the promise.
Rights and duties that come with the position
The mortgage document sets these out, within the limits of state law. In general terms the mortgagee can:
- Receive each payment on the due date and charge the late fee the note allows.
- Require the payer to keep the property insured and the property taxes paid.
- Give notice of default and, if it is not cured, foreclose, which is the legal process of having the property sold to repay the debt.
- Sell or assign the note and mortgage to someone else.
Obligations run the other way too: crediting payments accurately, giving a payoff figure when asked, and recording a release of the mortgage once the debt is paid in full. The detail differs by state, so a local attorney is the person to ask about what applies to you.
The mortgagee clause on the insurance policy
The word also turns up on a homeowner’s insurance policy. The mortgagee clause names the lender so that, if the property is damaged, the insurer pays in a way that protects the lender’s interest as well as the owner’s.
In a seller-financed sale it is easy for nobody to have arranged this, and a private holder may discover the omission only after a loss. Ask the payer for a copy of the policy’s declarations page each year and look for your name on it. Our page on what to do if your borrower lets the insurance lapse covers the case where there is no policy at all.
The same position under a deed of trust or land contract
“Mortgagee” belongs to mortgages, and other instruments have their own names for the same seat, each defined in the note basics hub. Under a deed of trust the lender is the beneficiary and the borrower is the trustor or grantor, with a third party, the trustee, named in the document to act if there is a default. Under a land contract the seller is the vendor and the buyer is the vendee, and the seller keeps legal title until the price is paid.
People call all of them “the mortgage” in conversation, but the label on your recorded document decides which terms and which remedies apply. The difference between a mortgage and a deed of trust, for one, shows up in how the lender enforces after a default.
When the mortgagee sells the note
The position can be sold. The note is endorsed to the buyer and an assignment of mortgage is recorded in the county records, after which the buyer is the mortgagee. The payer’s rate, payment and term stay as they were, and the payer is told where to send future payments.
What a buyer pays depends on the payments left, the payer’s record, the property and whether the lien is first in line, the last of which is explained on the page about what a lien is. If you want a figure for your own position, send us the terms of the note and mortgage.
Checking that you are named correctly
Find the recorded mortgage and the note and confirm that the mortgagee named on both is you. If the note came to you by inheritance or assignment, look for the recorded document that moved it into your name. Then check the payer’s insurance declarations page for the mortgagee clause.
If the name on the record belongs to someone else, such as a late spouse or a company that has since closed, put that right first. An attorney or title company in the property’s state can tell you which document does it.
Related questions
Is the mortgagee the borrower or the lender?
The lender. The borrower is the mortgagor, because the borrower gives the mortgage to the lender as security for the debt.
What is a mortgagee clause?
It is the part of a property insurance policy that names the lender and protects the lender's interest if the property is damaged. Private note holders should check they are named on the payer's policy.
Does the mortgagee own the property?
No. The borrower owns it. The mortgagee holds a lien, which is a legal claim that can be enforced through foreclosure if the borrower defaults.