purchase money mortgage


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Purchase-Money Mortgage

A mortgage in which the home buyer borrows from the seller instead of, or in addition to, a bank or thrift. Purchase-money mortgages usually are made when the buyer cannot qualify for an ordinary home loan due to lack of credit or income. Alternately, a seller may offer a purchase-money mortgage in a mortgage-takeover agreement, that is, when the sale price of the home is equal to what remains on the seller's own mortgage.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

purchase money mortgage

(1) A mortgage loan used to purchase real estate. It may be seller-financing, institutional lender financing, or any other type,as long as the loan proceeds were used to purchase the property. Some states prohibit lenders from suing borrowers on purchase money mortgages if a foreclosure sale does not result in enough money to pay the debt in full. (2) Sometimes used to refer to a purchase money security interest in personal property.Personal property security interests are sometimes called chattel mortgages, hence the expression purchase money mortgage. (3) In bankruptcy, the debtor may not keep normally exempt assets without paying the creditor if the creditor has a purchase money security interest.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
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The transaction was structured to deed 320 acres to each of the Hudspeths' two married children and their wives and 160 acres to their unmarried son in exchange for nonnegotiable notes and purchase money mortgages. The deal also included a leaseback to the Hudspeths.
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Section 128(b), which currently requires early good faith estimates of Truth in Lending disclosures in purchase money mortgages only, represents an exception to the general requirement that loan-specific Truth in Lending disclosures only need to be provided by consummation of the credit agreement (often at settlement).
Statement by Lawrence B. Lindsey, member, Board of Governors of the Federal Reserve System, before the Subcommittee on Consumer Affairs and Coinage of the Committee on Banking, Finance and Urban Affairs of the U.S. House of Representatives, May 27, 1992
2, b) or purchase money mortgages, lease purchase agreements or similar securities (Section 204, par.
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But HERA, recognizing this, as I said, directed us to come up with a regime in which purchase money mortgages and refinance mortgages are treated separately.
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