Are you a mortgagee or mortgagee?
It’s 2025, and it’s time for some mortgage questions and answers! Today’s question: “What is a mortgagee?”
No, that’s not a typo. I didn’t accidentally leave an extra “e” on the word mortgage, even though it may look that way.
You may also have needed to ignore the “spelling error” when you spell-checked this article.
Despite its similar appearance, it is actually a completely different word, in a way, once the letter E is added.
Don’t ask me how or why, I don’t claim to be an etymology expert.
It seems like a good way to confuse a lot of people, and it’s probably been successful in that department for years now.
You can blame British English for this, or perhaps American English.
Anyway, let’s stop attacking the English language and get this straight, shall we?
What is a mortgage?
A “mortgagor” (two Es!) is the entity that originates (makes) and sometimes holds a mortgage, known as a bank or mortgage lender.
They lend money so that people like you and me can buy property without draining our bank accounts.
It could also be your loan servicer, or the entity that sends you the mortgage bill each month, and perhaps an escrow analysis each year if your loan is foreclosed.
The mortgager extends the financing to the “mortgagor,” who is the homeowner or borrower in the transaction.
So, if you’re reading this and you’re not a bank, you’re the creditor. It’s that simple.
There is another way to remember this somewhat confusing word; Who is the mortgagee? Not me!!
Sorry, that’s the best I can come up with. It’s actually unforgettable though…
Mortgage rhymes with borrower, sort of
- Here’s an easy way to remember the word mortgage
- It kind of rhymes with the word borrower…or homeowner
- This is the case if you have a mortgage on your property
I was trying to think of a good association so homeowners could remember their name, rather than having to look it up every time they came across the word.
I think I came up with a semi-decent idea that’s not great. Mortgage rhymes with borrower, sort of. right? Not really, but they look and finish similar, don’t they?
However, the property (property) acts as security for the mortgage, and the mortgagor obtains a security interest in exchange for providing financing (home loan) to the mortgagor.
Yes, you still own the home if it has a mortgage, but the lender has the right to foreclose if you don’t keep your end of the deal.
If the mortgagee does not make the mortgage payments as agreed upon, the mortgagee has the right to seize possession of the property in question, usually through a process we have all at least heard called foreclosure.
Assuming this happens, the mortgage lender can eventually sell the property to a third party to pay off any liens or mortgages attached to it.
So, if you’re still unsure, you’re probably the mortgagee, also known as the homeowner with a mortgage. Your lender is the mortgagee. Yippee!
What makes this particular issue even more confusing is that the opposite is the case when it comes to related words like tenants and landlords.
Yes, for some reason the landlord is known as the “lessor”, while the tenant/tenant is known as the “lessee”. In other words, it’s the exact opposite for renters than it is for homeowners.
But I suppose it makes sense that both the owner and the mortgage borrower would be so Real estate owners.
What about the mortgage requirement?
- An important document you may come across when dealing with homeowners insurance
- Specifies who the lender (mortgagor) will be in the event of damage to the property in question
- Protects the lender’s interest if/when an insurance claim is made
- Because they are often the owners of the property
You may have also heard the term “mortgage clause” when going through the home loan process.
Refers to a document that protects the lender’s interest in the property in the event of any damage or loss.
It contains important information about the mortgagee/lender, including name, address, etc., so the homeowners insurance company knows exactly who owns the property in the event of a claim.
Remember, even though you are technically the homeowner, the bank will likely still have a significant amount of exposure to your property if you make a small down payment.
For example, if you come in with a down payment of only 3%, and the bank gives you a mortgage for 97% of the home’s value, the bank is more at risk than you.
This is why hazard insurance is required when you take out a mortgage, to protect the lender if something bad happens to the property.
Conversely, if you buy a home with cash, rather than taking advantage of the lower mortgage rates on offer, it will be your choice whether or not to secure it.
But most likely, you will need insurance coverage on your property regardless.
In summary:
Mortgagee: Bank or mortgage lender
mortgagor: Borrower/Homeowner (Maybe You!)
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My work experience in the early 2000s inspired me to start writing about mortgages 18 years ago to help potential (and current) homebuyers better navigate the home loan process. Follow me on Twitter for hot takes.
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