Mortgage — Lien Theory vs. Title Theory

In lien-theory states (majority), the mortgagor retains title and the mortgagee holds a security lien. In title-theory states (minority), the mortgagee holds legal title until the debt is satisfied. In intermediate-theory states, the mortgagee may take title only upon default.

Related Mortgages & Security Devices rules

• Equity of Redemption and Statutory RedemptionA mortgagor has an equitable right to redeem by paying the full debt at any time before foreclosure sale. Many states…
• ForeclosureForeclosure terminates the mortgagor's equity of redemption. Judicial foreclosure (sale under court supervision) is…
• Due-on-Sale ClausesA due-on-sale clause accelerates the mortgage debt when the property is sold without lender consent. Federal law (the…
• Assumption vs. Subject ToA grantee who assumes the mortgage becomes personally liable for the debt; both the grantor and grantee are liable. A…
• Priority Among MortgagesAbsent a recording act, mortgage priority follows the order of creation (first in time, first in right). A purchase…
• Deed of TrustA deed of trust is a security device in which the borrower (trustor) conveys title to a neutral third party (trustee)…

Part of Real Property on Core Legal Rules — foundational MBE-tested principles with primary-source citations.