In a lien theory state, who holds the title to the mortgaged property?

In a lien theory state, who holds the title to the mortgaged property?

• A. Lender
• B. Trustee
• C. Mortgagor
• D. Beneficiary

Answer: (C)

In a lien theory state, the borrower who granted the mortgage keeps the title to the property. The lender’s interest is only a lien—a security right that allows foreclosure to satisfy the debt if the borrower defaults. The title stays in the mortgagor’s name while the loan is outstanding, and the lien is released when the loan is paid off. Roles like the lender holding title, or a trustee/beneficiary holding title in a trust arrangement, apply to other arrangements, not the standard lien-theory mortgage.

In a lien theory state, the borrower who granted the mortgage keeps the title to the property. The lender’s interest is only a lien—a security right that allows foreclosure to satisfy the debt if the borrower defaults. The title stays in the mortgagor’s name while the loan is outstanding, and the lien is released when the loan is paid off. Roles like the lender holding title, or a trustee/beneficiary holding title in a trust arrangement, apply to other arrangements, not the standard lien-theory mortgage.