Statement of the Problem

This study desires to answer the effect of mortgage financing on performance of real

estate industry. To substantiate the main problem, answers to the following problems

were sought:

1. What is the Demographic Profile of the respondents in terms of:

1.1 Gender

1.2 Age

1.3 Level of Education

2. What are the factors affecting mortgage financing?

3. What are the factors affecting performance of Real Estate Company?

4. Relationship of Mortgage Financing to Performance of Real Estate Company?

Theoretical Framework

The Lien Theory

The lender acquires lien while the borrower acquires equitable and legal titles of the
mortgage property. It is a mirror to encumbrances on the mortgage property. It protects
the lender since incase of default by the borrower, the lender is entitled for legal
repossession of the mortgage property. Medley (2011) proved that under lien theory, the
borrower acquires the title upon signing of the documents but there are encumbrances
which the lender holds in case of default by the borrower. In case of default, lenders face
difficulties to repossess mortgage property since the borrower holds the title and possess
the mortgage property and land.
 The Title Theory

The lender retains the legal repossession until the mortgage is fully paid up. The lender
holds the legal title while the borrower holds equitable title only. The legal title is vested
in the lender until the mortgage loan is repaid. The borrower is recognized as the owner
of the property and the lender has the right to rents and possession. In case of default,
the lender is entitled to repossession of the property. Denise and Wheaton (1992) noted
that upon signing of mortgage documents, the lender acquires full ownership of the
mortgage property while the borrower acquires only control until the mortgage is fully
paid off. This is used as a measure since the property is held by the lender as collateral.
During the mortgage period, the borrower doesn’t have title to the property. Upon
satisfaction of loan obligations, the lender delivers the deed to the borrower.

Conceptual Framework

Mortgage Financing
Performance of
 Mortgage Terms Real Estate
 Mortgage Interest Company

Month Repayment Charges

Incremental Interest Rates
Insurance Charges
Monthly Mortgage Interest Rate
Collateral Needed
Loan Duration