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

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Multiple Choice

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

Explanation:
In a lien theory state, the borrower preserves ownership of the property. The lender’s interest is only a mortgage lien—security for the loan—so title remains in the mortgagor’s name. Foreclosure is the remedy to satisfy the debt, not a transfer of ownership unless the sale proceeds to a new owner. Concepts involving a trustee or beneficiary relate to a deed-of-trust arrangement, where title can be held by a third party for the lender. Therefore, the holder of title is the mortgagor.

In a lien theory state, the borrower preserves ownership of the property. The lender’s interest is only a mortgage lien—security for the loan—so title remains in the mortgagor’s name. Foreclosure is the remedy to satisfy the debt, not a transfer of ownership unless the sale proceeds to a new owner. Concepts involving a trustee or beneficiary relate to a deed-of-trust arrangement, where title can be held by a third party for the lender. Therefore, the holder of title is the mortgagor.

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