What Is a Mortgage Put-Back?

Mortgage lending is referred to as "mortgage", and banks require borrowers to provide certain collateral as a guaranteed loan. Collateral is generally easy to save and sell property, such as securities, real estate, bills of lading, etc. Mortgage is different from pledge. Pledged property must be transferred, while collateral is not required to be transferred. Once the property is mortgaged, it is legally owned by the creditor, the loan is not repaid when due, and the bank has the right to dispose of the collateral as compensation. Using property as collateral can reduce the risk of bank lending, and borrowers can obtain loans at lower interest rates. Therefore, in capitalist countries, this is a widely used method of lending. After the founding of the People's Republic of China, this type of lending was mainly used for capitalist industry and commerce. ^[1]

Mortgage loan

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Mortgage lending is referred to as "mortgage", and banks require borrowers to provide certain collateral as a guaranteed loan. Collateral is generally easy to save and sell property, such as securities, real estate, bills of lading, etc. Mortgage is different from pledge. Pledged property must be transferred, while collateral is not required to be transferred. Once the property is mortgaged, it is legally owned by the creditor, the loan is not repaid when due, and the bank has the right to dispose of the collateral as compensation. Using property as collateral can reduce the risk of bank lending, and borrowers can obtain loans at lower interest rates. Therefore, in capitalist countries, this is a widely used method of lending. After the founding of the People's Republic of China, this type of lending was mainly used for capitalist industry and commerce. ^[1]

This kind of loan method has greatly reduced the risk of loans to commercial banks and ensured the security of the loans. Therefore, it has been widely used in long-term investment loans.