Under lien theory, who retains title to the property?

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Multiple Choice

Under lien theory, who retains title to the property?

Explanation:
With lien theory, the borrower retains title to the property while the lender holds a security interest in the form of a lien. This means the borrower remains the owner, continues to use and manage the property, and is responsible for paying taxes, insurance, and upkeep. The lender’s rights come from the lien—if the borrower defaults, the lender can foreclose to satisfy the debt, but ownership isn’t transferred to the lender simply by the loan existing. Only through foreclosure would title pass to the lender in that event. This is why the borrower is the correct answer.

With lien theory, the borrower retains title to the property while the lender holds a security interest in the form of a lien. This means the borrower remains the owner, continues to use and manage the property, and is responsible for paying taxes, insurance, and upkeep. The lender’s rights come from the lien—if the borrower defaults, the lender can foreclose to satisfy the debt, but ownership isn’t transferred to the lender simply by the loan existing. Only through foreclosure would title pass to the lender in that event. This is why the borrower is the correct answer.

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