equitable mortgage
Also found in: Legal.
equitable mortgage
The declaration by a court that an instrument by which one is to pay money to another and,as a result,receive title to real property when all payments have been completed is in reality a mortgage,and the parties will be treated as if they had all the rights and responsibilities of a mortgage relationship.The exception is if an innocent third party buys the property; then the equitable mortgagor—the person making the payments—cannot recover the property but may only sue the seller for damages.See also equitable lien.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.