Mortgagee
Definition:
A mortgagee is the lender or financial institution that provides funds to a borrower in exchange for a security interest in real property. The mortgagee holds the lien on the property until the borrower, known as the mortgagor, fully repays the loan according to the terms of the mortgage note.
Mortgagee Information
The mortgagee plays a central role in real estate financing by providing the capital needed for property purchases or refinances. In return, the mortgagee receives a legal right to foreclose on the property if the borrower defaults on the loan. Mortgagees may include banks, credit unions, private lenders, or government-backed entities such as Fannie Mae or Freddie Mac. Their rights and remedies are defined by the loan agreement, mortgage document, and applicable state laws. Because the mortgagee’s interest is secured by the property, it has priority over most other creditors in the event of default or bankruptcy.
Florida Legal Definition
Under **Florida law**, a mortgagee is the party that holds a mortgage lien against real property to secure repayment of a debt, as defined in **Chapter 697, Florida Statutes**. Florida is a **lien theory state**, meaning the mortgagee holds only a lien—not title—until the debt is satisfied. If a borrower defaults, the mortgagee must initiate a **judicial foreclosure** to enforce its lien and recover the property. Florida law also requires mortgagees to record the mortgage in the county’s public records to provide notice of their interest and preserve lien priority.
How It’s Used in Practice
In practice, the mortgagee is typically the lending institution that issues and services the mortgage loan. The mortgagee collects payments, manages escrow accounts, and enforces the loan’s terms. If the mortgage is sold, the new lender becomes the mortgagee of record. In foreclosure actions, the mortgagee is the plaintiff seeking to enforce its security interest. Understanding the mortgagee’s role is essential for borrowers, as all payment obligations, default notices, and loan modifications must go through the mortgagee or its authorized servicer.
Key Takeaways
- A mortgagee is the lender that provides funds and holds a lien on the borrower’s property.
- In Florida, the mortgagee holds a lien—not ownership—until the loan is fully repaid.
- Defined under Chapter 697, Florida Statutes, and enforced through judicial foreclosure if default occurs.
- Mortgagees must record the mortgage to establish lien priority and protect their interest.
- Can transfer their rights to another lender or investor through assignment of the mortgage note.
Disclaimer: The information and opinions provided are for general educational, informational or entertainment purposes only and should not be construed as legal advice or a substitute for consultation with a qualified attorney. Any information that you read does not create an attorney–client relationship with Barnes Walker, Goethe, Perron, Shea & Johnson, PLLC, or any of its attorneys. Because laws, regulations, and court interpretations may change over time, the definitions and explanations provided here may not reflect the most current legal standards. The application of law varies depending on your particular facts and jurisdiction. For advice regarding your specific situation, please contact one of our Florida attorneys for personalized guidance.
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