What is a key feature of a valid mortgage contract?

A valid mortgage contract must be recorded to provide public notice of the mortgage and to protect the lender's interests. Recording the mortgage secures the lender's claim against the property and establishes priority over other potential liens or claims that may arise. This means that if the borrower defaults on the loan, the recorded mortgage will allow the lender to initiate foreclosure proceedings with a clear legal basis for their claim.

While there are other important elements in a mortgage contract, such as having an interest rate, the act of recording the document is essential for legal enforceability and to establish the lender's rights in the property. Notarization and the presence of witnesses, while helpful for proving the authenticity of a document, are not required for a mortgage to be valid in all jurisdictions, making recording a key feature that distinguishes a valid mortgage from others. Thus, recording is fundamental to ensuring that a mortgage contract effectively serves its purpose in real estate transactions.