What role does a mortgagee play in a mortgage transaction?

In a mortgage transaction, the mortgagee is commonly referred to as the lender. This is the party that provides funds to the borrower, who is the homeowner or property buyer, in exchange for a security interest in the property. The mortgagee holds the mortgage, which secures the loan, and has the right to foreclose on the property if the borrower fails to meet their repayment obligations.

The lender's role is crucial because they assess the borrower's financial situation, approve the loan, and set the terms, including the interest rate and repayment schedule. Additionally, the lender manages the mortgage account, ensuring that payments are collected and applicable laws concerning mortgage lending are followed. This position is distinctly different from that of a borrower, who receives the loan, or a guarantor, who might provide a guarantee for the loan without being the primary party involved in the mortgage. Thus, identifying the mortgagee specifically as the lender underscores their primary function in the transaction.