A real estate trust that will get income from mortgage interest, loan origination fees and buying and selling mortgages is Real Estate Mortgage Trust (REMT) trust.
What is a mortgage?
- A mortgage is a legal instrument of the common law which is used to create a security interest in real property held by a lender as a security for a debt, usually a mortgage loan.
- Hypothec is the corresponding term in civil law jurisdictions, albeit with a wider sense, as it also covers non-possessory lien.
- A mortgage in itself is not a debt, it is the lender's security for a debt.
- It is a transfer of an interest in land (or the equivalent) from the owner to the mortgage lender, on the condition that this interest will be returned to the owner when the terms of the mortgage have been satisfied or performed.
- In other words, the mortgage is a security for the loan that the lender makes to the borrower.
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