Question: Which States Are Title Theory States?

Is North Carolina a lien or title theory states?

North Carolina is a title theory state so the mortgagee holds legal title to the property.

A mortgage is drafted as either a conveyance of the property to the mortgagee (the title theory) or as a lien to secure payment of a debt (the lien theory)..

In lien theory states, the buyer, who is also the borrower, will hold the deed to the real estate property for the life of the mortgage. The buyer promises to make payments on the mortgage according to the terms spelled out in the financing agreement.

What is the difference between a title and a lien?

In a lien theory state, the buyer holds the deed to the property during the mortgage term The buyer promises to make all payments to the lender and the mortgage becomes a lien on the property, but title remains with the buyer. … The Deed of Reconveyance removes the lender’s interest in the property.

Is Texas a title theory state?

Texas is a title theory state, where a lender holds the title to a borrower’s property in a Deed of Trust. In a lien theory state, the borrower holds the title, and the lender has a lien against the title until the loan is paid.

What does title theory state mean?

In title theory or mortgage states title is held in the lender’s name until the final payment is made, when title is passed or re-conveyed to the borrower. In lien theory states, title to the property is held in the name of the borrower with a security interest or lien to the property being granted to the lender.

Is va a title theory state?

Virginia is a “title theory” state, meaning that the property title remains in trust until the loan is made in full.

Is AZ a lien theory state?

Lien Theory State- Arizona is a Title State.

Is Maryland a title theory state?

Maryland is a “title theory” state, meaning that a mortgage or deed of trust constitutes an actual conveyance of title to the property by the borrower, rather than the mere grant of a lien in the property.

Who holds title in a mortgage?

In title theory states, a lender holds the actual legal title to a piece of real estate for the life of the loan while the borrower/mortgagor holds the equitable title.

What is a lien theory state quizlet?

lien theory state. a state in which a mortgagee has equitable title to a secured property. When homebuyer Henry pledges his newly purchased home as collateral for a mortgage loan, the evidence of the pledge is the. trust deed or mortgage.