Does it matter that the headline is correct or do you believe I am just splitting hairs? If you owe a bundle how important is the fact that the parameters of the debt can be widely different? Is unsecured debt really unsecured? Why is mortgage debt generally superior to all debt? If you fail to understand the differences in debt, the nuances of the questions and

the need to be able to move to correct the mistakes, you will spend a great deal of your life being the odd-man out.

Let us start with credit card debt, which most people will tell you is unsecured (not attached to any of your assets). In reality this debt is more secured than specific debt such as your home mortgage and your automobile. Why? Because the credit card companies have spent a "ton" of money to make sure you cannot discharge their debt through bankruptcy as easily as you used to be able to. Unsecured debt is really secured by all of your assets while specific secured debt is just secured, for the most part, by the asset used for security. Failure to make your car payment and your car will be reposed. If their is a deficiency after the repossession it generally is written off.

Mortgage debt is secured but definitely different than normal secured debt. In most states if you take out a mortgage to purchase a house it is considered a "purchase money" mortgage. That term used to be reserved for a mortgage given by the seller of the property

to the buyer. Again in most states it simply means the mortgage you take to buy the house regardless of who is giving it to you. These mortgages, purchase money, are deficiency free, again in most states. In other words you can walk away from the property without any worry about any loss to the mortgage holder. THIS IS NOT TRUE FOR REFINANCED MORTGAGES! (however it can be - read on).

In states where a mortgage is really a note secured by a deed of trust the holder of the note can foreclose on the borrower if payments are missed by electing to sell the house at a public auction to the highest bidder, after sufficient notice is given. If that occurs and the buyer loses the house all liability is dismissed in case of a loss.(Coincidentally, the current owner can go to the foreclosure sale and buy the house from the lender who is foreclosing on him. When that happens, rarely, it is really a form of public negotiation.)

In the aforementioned states when a lender wants to go after the borrower then they use a judicial foreclosure, through a court, and the liability is assigned to the borrower. This is rarely used because the borrower has a year to right the ship and pay the debt and get the property back. Lenders do not want to hold the property for a year and thus this method is more a "big threat" more than an actual solution.

Writers note: These are general rules and can differ in your state, county or township.

Check with the real estate official to be sure of the rules and regulations in your area.

Debt is priced in relation to the security given the credit granter. Mortgages are considered the safest debt because they are secured by , for the most part, the most stable asset.

(current times would contradict that statement but over the long haul it is probably true).

Mortgage debt is currently priced in a range from the shorter amortization (time to pay back the loan) to the longer amortization. Rates run from the high 4% range to the 6% range for 10 and 15 year fully amortized loans. For longer amortized loans, 20 to 30 or even 40 years, rates go from the high 5% range into the high 7% range. Second mortgages and Helocs are priced higher. Most mortgages have interest that is tax deductible. This is not determined by the loan but by the economic situation particular to the borrower. (Check with your tax consultant) Continued...