The master mortgage is the term used to identity the mortgage documents that are kept on file as part of public land records. Documents of this type are often useful in managing the process of recording liens on various properties, as well as simplifying the process of buying and selling mortgages in some type of secondary market. While public land records are maintained in just about every country around the world, referring to mortgages that are held within public records as master mortgages is most often associated with the United States.
According to laws and regulations that govern the sale of real estate in the United States, every business that originates a mortgage of some type is responsible for filing the master mortgage associated with each transaction. Originally developed by Freddie Mac and Fannie Mae, two of the major mortgage lenders in the USA, the format used for the submission creates the foundation for the application of any later updates or amendments to mortgage activity that involves the property, such as the creation of a second or third mortgage. In addition, federal laws require that the basic documentation of the master mortgage must be filed in the public land records before any type of lien can be recorded on the property.
The value of depositing the master mortgage in this central public land record file is that it helps to simplify a number of processes associated with the purchase and sale of tracts of land. Realtors, mortgage companies, and others involved in the sale or financing of real estate can quickly consult these records and determine the current status of the property. This includes determining if there is already a mortgage carried by the property, if the mortgage is current or in default, and who currently holds the mortgage. Prior to the implementation of this type of record keeping, gathering essential data of this type could take days. Now, the research into the background of a given property can be completed within hours.
The actual recording process associated with the master mortgage takes place via the county or parish registrar in the community where the property is located. This data is then submitted to a central database, where it is available for public access from anywhere in the nation. Abstractors who are hired by prospective buyers or realtors can then access these records on behalf of their clients and secure all the necessary background to determine the current ownership and financial standing of the property. This can be especially helpful when attempting to close a mortgage on a given property, since it can reveal any data regarding secondary liens that may exist along with an outstanding first mortgage.
A number of different forms are used to record the master mortgage. The types of forms used vary somewhat from one jurisdiction to the next. In some counties or parishes, a short form can be used for residential properties that do not currently carry more than one lien. Other jurisdictions may require the filing of additional forms, based on tax structures, and the number and type of liens already in place. Many jurisdictions also require specific forms when the first mortgage is paid in full, and a new mortgage is written shortly thereafter.