Mortgagee in Possession

A situation in which a lender upon foreclosure of the loan secured by the mortgage takes possession and control of the mortgaged property and collects any income produced until it is sold at a foreclosure sale. Example: Following nonpayment of debt service for a period of 6 months, Savings Bank filed for foreclosure of the loan. Fearing dam-ages to the property, Savings immediately took possession under an action of mortgagee in possession.