lien-theory states

States that treat a mortgage solely as a security interest in real property, with title to the property retained by the borrower. Contrast with title theory states, in which the actual title to the property passes to the creditor,who then has an obligation to reconvey it to the debtor when the loan has been paid in full.Contrast also with hybrid theory,a mixture of the two.

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References in periodicals archive

(111) States that take the former view are called title-theory states, while states that adopt the latter view are lien-theory states. (112) In a title-theory state, a mortgage (or deed of trust) is seen as a sale and repurchase arrangement: title to the land is presently conveyed to the mortgagee or deed-of-trust trustee and is then reconveyed to the mortgagor upon satisfaction of the debt or sold upon default.

Even in lien-theory states, however, various formalities may still be required for the granting and transfer of mortgages.

The paper chase: securitization, foreclosure, and the uncertainty of mortgage title

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