BROWSE

Participation Mortgage

Definition

A participation mortgage or participating mortgage is a mortgage loan, or sometimes a group of them, in which two or more persons have fractional equitable interests. In this arrangement the lender, or mortgagee, is entitled to share in the rental or resale proceeds from a property owned by the borrower, or mortgagor. The mortgage is evidenced by the bank or other fiduciary that has legal title to the mortgage and sells the fractional shares to investors or makes the investment for the certificate holders. A participation mortgage may or may not require principal and interest payments and may or may not contain a balloon payment.

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What is 'Participation Mortgage'

A participation mortgage is a type of mortgage that allows the lender to share in part of the income or resale proceeds. The lender participates in the income of the mortgaged property beyond a fixed return, or receives a yield on the loan in addition to the straight interest rate.

Explaining 'Participation Mortgage'

In a participation mortgage, the lender (mortgagee) is entitled to share in the rental or resale proceeds from a property owned by the borrower (mortgagor). The mortgage is evidenced by the bank or another fiduciary that has legal title to the mortgage and sells the fractional shares to investors or makes the investment for the certificate holders.


Further Reading


Financial literacy and pension plan participation in ItalyFinancial literacy and pension plan participation in Italy
papers.ssrn.com [PDF]
… By requiring individuals to decide whether to participate in (newly established) pension funds, how … Pension plan participants were about 3.2 millions (of which 2.1 private sector employees) in … for economics/finance within the household, or it may affect pension plan participation …

Financial literacy and retirement planning in SwitzerlandFinancial literacy and retirement planning in Switzerland
www.alexandria.unisg.ch [PDF]
… By requiring individuals to decide whether to participate in (newly established) pension funds, how … Pension plan participants were about 3.2 millions (of which 2.1 private sector employees) in … for economics/finance within the household, or it may affect pension plan participation …

Participating mortgages and the efficiency of financial intermediationParticipating mortgages and the efficiency of financial intermediation
www.sciencedirect.com [PDF]
… By requiring individuals to decide whether to participate in (newly established) pension funds, how … Pension plan participants were about 3.2 millions (of which 2.1 private sector employees) in … for economics/finance within the household, or it may affect pension plan participation …

Numeracy, financial literacy and participation in asset marketsNumeracy, financial literacy and participation in asset markets
papers.ssrn.com [PDF]
… By requiring individuals to decide whether to participate in (newly established) pension funds, how … Pension plan participants were about 3.2 millions (of which 2.1 private sector employees) in … for economics/finance within the household, or it may affect pension plan participation …

Financial literacy and stock market participationFinancial literacy and stock market participation
www.sciencedirect.com [PDF]
… By requiring individuals to decide whether to participate in (newly established) pension funds, how … Pension plan participants were about 3.2 millions (of which 2.1 private sector employees) in … for economics/finance within the household, or it may affect pension plan participation …

Changing college students' financial knowledge, attitudes, and behavior through seminar participationChanging college students' financial knowledge, attitudes, and behavior through seminar participation
link.springer.com [PDF]
… By requiring individuals to decide whether to participate in (newly established) pension funds, how … Pension plan participants were about 3.2 millions (of which 2.1 private sector employees) in … for economics/finance within the household, or it may affect pension plan participation …

Reverse mortgage participation in the United States: Evidence from a national studyReverse mortgage participation in the United States: Evidence from a national study
www.mdpi.com [PDF]
… By requiring individuals to decide whether to participate in (newly established) pension funds, how … Pension plan participants were about 3.2 millions (of which 2.1 private sector employees) in … for economics/finance within the household, or it may affect pension plan participation …

Interest rate pass-through to bank mortgage and participation bond rates in South Africa: Evidence from ARDL and FMLS modelsInterest rate pass-through to bank mortgage and participation bond rates in South Africa: Evidence from ARDL and FMLS models
academicjournals.org [PDF]
… By requiring individuals to decide whether to participate in (newly established) pension funds, how … Pension plan participants were about 3.2 millions (of which 2.1 private sector employees) in … for economics/finance within the household, or it may affect pension plan participation …

Financial literacy, household investment and household debt: Evidence from SwitzerlandFinancial literacy, household investment and household debt: Evidence from Switzerland
www.alexandria.unisg.ch [PDF]
… By requiring individuals to decide whether to participate in (newly established) pension funds, how … Pension plan participants were about 3.2 millions (of which 2.1 private sector employees) in … for economics/finance within the household, or it may affect pension plan participation …



Q&A About Participation Mortgage


What does it mean to have fractional equitable interests?

Fractional equitable interest means that you have an ownership stake in something without having full ownership rights over it. In this case, you own part of something but not all of it. You can also think about fractional equitable interest as partial ownership rights over something else. For example, if you were given 10% equity in your friend's business and he was given 90%, then you would be said to have a 10% fractional equitable interest while he would be said to have a 90% fractional equitable interest since he owns more than half (50%) of the company's equity shares (ownership). If someone has 100% equity they do not need any other investors because they already own everything themselves; therefore, they do not need anyone else's money or investment for their business venture and thus no one else has any partial ownership rights over anything since everyone who invested into their business already gave up their right to own anything beyond what they put into it when they gave up their money or assets as collateral for getting an investment loan from them for starting up their new business venture with them as its owner/founder/CEO/President/etc.. However, if someone only had 50% equity then

What is a participation mortgage?

A participation mortgage is a type of mortgage that allows the lender to share in part of the income or resale proceeds.

Are there different types of participation mortgages?

Yes, there are different types.

Who participates in the income of the mortgaged property?

The borrower participates in the income of the mortgaged property.

What are some examples of participation mortgages?

Some examples of participation mortgages include commercial loans, residential loans, and group mortgages.

How are mortgages evidenced?

Mortgages are evidenced by banks and other fiduciaries who hold legal title to them. They sell fractional shares to investors or make investments for certificate holders.

What does a participation mortgage allow lenders to do?

Lenders can participate in rental or resale proceeds from a property owned by borrowers.

How does one participate in income stream provided by particular properties?

The lender participates in the income stream provided by particular properties through fractional equitable interests.