In seller financing, who is the mortgagee and who is the mortgagor?

In the context of seller financing, the roles of mortgagee and mortgagor are defined by the flow of funds and the security interest in the property. The seller acts as the mortgagee because they are the one providing the financing, effectively lending money to the buyer in the form of a loan that is secured by the property itself. The buyer, on the other hand, is the mortgagor because they are borrowing funds from the seller to purchase the property.

In this arrangement, the seller holds a security interest in the property until the buyer fully repays the loan. This means that the seller can foreclose on the property if the buyer fails to make the required payments, similar to a traditional lender. Thus, in seller financing, it is the seller acting as the mortgagee, while the buyer functions as the mortgagor.