Definition of a Master Mortgage

A master mortgage includes the documents that mortgage originators file as a routine part of the record-keeping protocol. When a particular property is purchased for the first time, the master mortgage is created. If the balance on the initial mortgage is paid off and the property is sold creating a new mortgage, the second mortgage replaces the first master mortgage. Each time that this property is sold, this documentation is consulted to ensure that all debts have been cleared from the property.

Tracking Liens

These records make it easier to keep track of any liens that may be on the property. A lien is a bank's claim to a property should an outstanding payment remain unpaid. When a property is being resold, the records are checked to ensure that all previous debts were paid. If a lien is found, then the issue of the outstanding debt must be dealt with before a new owner with a new mortgage can take ownership of the property. Until that time, the bank has a right to hold the property.

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