The preferred type of pledge, in which the property's profits went to paying off the debt and thus continued to benefit the borrower, was known in Old French by the term vif gage, "living pledge." By the time of the great English jurist Thomas Littleton's Treatise on Tenures (1481), however, the mortgage had evolved into its modern form-a conditional pledge in which the property (and its profits) remain in possession of the debtor during the loan's repayment.
In his Tractatus de legibus et consuetudinibus regni Angliae (1189), Ranulf de Glanville explains that this latter type of pledge, in which the fruits of the property were taken by the creditor without reduction in the debt, was known by the term mort gage, which in Old French means "dead pledge." Because of Christian prohibitions on profiting from money lending, however, the mortgage was considered a species of usury. Under this arrangement, the profits or benefits that accrued to the holder of the property could either be applied to the discharge of the principal or taken by the creditor as a form of interest. Word History: In early Anglo-Norman law, property pledged as security for a loan was normally held by the creditor until the debt was repaid.
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