A mortgage loan is a very common type of debt instrument，used to purchase realestate.Under this arrangement，the money is used to purchase the property.Commercial banks，however，are given security——a lien on the title to the house——until the mortgage is paid off in full.If the borrower defaults on the loan，the bankwould have the legal right to repossess the house and sell it，to recover sums owing to it.

　　In the past，commercial banks have not been greatly interested in real estate loansand have placed only a relatively small percentage of their assets in mortgages.Astheir name implies，such financial institutions secured their earning primarily fromcommercial and consumer loans and left the major task of home financing to others.However，due to changes in banking laws and policies，commercial banks areincreasingly active in home financing.

　　Changes in banking laws now allow commercial banks to make home mortgageloans on a more liberal basis than ever before.In acquiring mortgages on real estate，these institutions follow two main practices.First，some of the banks maintain activeand well-organized departments whose primary function is to compete actively for realestate loans.In areas lacking specialized real estate financial institutions，these banksbecome the source for residential and farm mortgage loans.Second，the banks acquiremortgages by simply purchasing them from mortgage bankers or dealers.

　　In addition，dealer service companies，which were originally used to obtain carloans for permanent lenders such as commercial banks，wanted to broaden theiractivity beyond their local area.In recent years，however，such companies haveconcentrated on acquiring mobile home loans in volume for both commercial banksand savings and loan associations.Service companies obtain these loans from retaildealers，usually on a nonrecourse basis.Almost all bank/service company agreementscontain a credit insurance policy that protects the lender if the consumer defaults.