In a title theory state, the what takes title to the mortgaged property during the term of the mortgage?

In a title theory state, the mortgagee takes title to the mortgaged property during the term of the mortgage. This means that when a borrower (the mortgagor) takes out a mortgage, the lender (the mortgagee) holds legal title to the property as a security for the loan. This principle stems from the way title theory states handle the ownership rights associated with a mortgage.

In title theory states, the mortgage effectively conveys title to the property from the borrower to the lender as a form of collateral. This arrangement grants the mortgagee the legal right to the property, whereas the mortgagor retains equitable rights, meaning they still have the right to possess and use the property as long as they are fulfilling their obligations under the mortgage.

This contrasts with lien theory states, where the mortgagor retains full title to the property and only a lien is granted to the mortgagee, providing the lender a claim to the property in the event of default but not legal ownership until foreclosure processes are initiated.

Understanding this distinction is crucial for recognizing how property rights are structured under different mortgage laws.