National Real Estate Practice Exam

Who typically acts as the lender in a mortgage transaction?

1. Vendee

2. Mortgagor

3. Mortgagee

4. Grantor

The correct answer is: Mortgagee

In a mortgage transaction, the mortgagee is the party that provides the funds for the loan, effectively acting as the lender. This role is typically filled by banks, credit unions, or other financial institutions that offer mortgage products to borrowers. The mortgagee holds a security interest in the property through the mortgage, which means they have the right to take possession of the property if the borrower fails to repay the loan as agreed. The other terms refer to different roles in the mortgage process. The mortgagor is the borrower who takes out the mortgage loan and gives the mortgagee a security interest in the property. The vendee generally refers to a buyer in a transaction involving a land contract or installment sale, not specifically within the mortgage lending framework. The grantor is typically the person who transfers ownership of property, which is not the focus of the mortgage lending aspect. Therefore, the clear distinction is that the mortgagee specifically acts as the lender in this context.