A mortgagee is the party that holds the mortgage. The mortgagee is typically a financial institution, such as a bank or a mortgage company.
The mortgagee has a number of rights under the mortgage, including:
- The right to demand payment of the mortgage debt.
- The right to take possession of the mortgaged property if the mortgage debt is not paid.
- The right to sell the mortgaged property to recover the mortgage debt.
The mortgagee also has a number of responsibilities under the mortgage, including:
- The responsibility to keep the mortgage documents safe.
- The responsibility to notify the mortgagor if the mortgage is going to be sold.
- The responsibility to account to the mortgagor for any surplus proceeds from the sale of the mortgaged property.
In the context of securitisation, the mortgagee is typically the originator of the mortgages that are being securitised. The mortgagee will then sell the mortgages to a special purpose vehicle (SPV), which will then issue securities to investors.
The applications of the mortgagee in the context of securitisation include:
- Originating mortgages: The mortgagee is responsible for originating the mortgages that are being securitised. This involves assessing the creditworthiness of the borrowers and ensuring that the mortgages meet the requirements of the securitisation transaction.
- Selling mortgages to an SPV: The mortgagee will sell the mortgages to an SPV, which will then issue securities to investors. This allows the mortgagee to raise capital and reduce its exposure to the mortgages.
- Monitoring the performance of the securitisation transaction: The mortgagee will monitor the performance of the securitisation transaction and ensure that the payments from the borrowers are being made on time. This is important to protect the interests of the investors.
Overall, the mortgagee is an important party in the securitisation process. They are responsible for originating the mortgages, selling them to an SPV, and monitoring the performance of the securitisation transaction.