When real property is transferred absolutely, the transaction is effected by delivery of a deed. Since very early times it has been customary for owners of realty to borrow money, pledging their property for its repayment. A loan upon a promissory note may be good when made, yet the borrower may become bankrupt and the note when due have no value. Even a loan secured by a pledge of personal property is uncertain for it, unlike realty, has no permanent place; it may be moved away, disappear or be concealed. Loans upon security of land, being so much better secured, have always been in favor and a large part of the realty, particularly in cities, is covered by mortgages as security for loans. The amount loaned should, of course, bear a fair relation to the value of the property, but since this question is more fully discussed in a later chapter, it is not dwelt upon here.

The bond and mortgage are the two instruments by which a loan on realty is secured. The bond is the evidence of indebtedness and the promise to repay; the mortgage a pledge of specific realty as security.