Question

Which statement is correct in a lientheory

state such as Florida?
a. The borrower will obtain title only after
the loan is paid.
b. Foreclosure will take place much quicker
than in title theory states.
c. The borrower conveys title to the lender
using a deed of trust.
d. The mortgage serves as a lien against
the property.

Answer 1

In a lien theory state such as Florida, the correct statement is option d. The mortgage serves as a lien against the property.

Step-by-step explanation:

In a lien theory state such as Florida, the correct statement is option d. The mortgage serves as a lien against the property.

Liens on property are legal claims that are used as security for a debt. In a lien theory state, the mortgage creates a lien on the property that the borrower is purchasing.

This means that if the borrower fails to repay the loan, the lender has the right to foreclose on the property and sell it to recover the debt.

Unlike in title theory states, where the lender holds the title to the property until the loan is repaid, in lien theory states like Florida, the borrower obtains legal title to the property at the time of purchase.

However, the mortgage serves as a lien against the property until the loan is fully paid off.