What are lien theory states?
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..
Is Maryland a lien 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.
Is AZ a lien theory state?
Lien Theory State- Arizona is a Title State.
Who holds title in a lien theory state?
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.
What type of foreclosure does a lien theory state provide?
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 lender’s lien is removed once the payment of all loan payments have been completed.
What is the difference between a mortgage and a lien?
A mortgage is basically just a loan that allows you to borrow money to buy or fix up a house. A lien is the bit of the mortgage that gives the lender the right to seize and sell your home if you default on the mortgage payments.