Question
Which of the following statements about Mortgage are not
true? 1. Under a mortgage, the legal ownership of the asset can be transferred to the lender if the borrower defaults on the loan amount 2. The borrower continues to remain in possession of the property 3. A mortgage is usually used for movable assets 4. There is a government guarantee involved always.Solution
Under a mortgage, the legal ownership of the asset can be transferred to the lender if the borrower defaults on the loan amount. However, the borrower continues to remain in possession of the property. A mortgage is usually used for immovable assets (example: house, land, building, or any property which is permanently fixed to the earth or attached to the land). Home loans classify as mortgages. They are given against a collateral and no guarantee is taken
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