In a lien theory state, who owns the mortgage?

In lien theory states, the mortgage creates a lien against the property rather than transferring ownership of the property itself to the lender. This means that the borrower retains the actual title to the property while the lender holds a lien on it as collateral for the loan.

The correct understanding is that, in this context, the lender does not own the property; however, they have a legal claim (the lien) against the property until the mortgage is paid off. This structure highlights the borrower's rights to the property while also illustrating the lender's security interest in the asset. The mortgage serves as an assurance for the lender that, should the borrower default on the loan, they have the right to foreclose and reclaim the property to satisfy the debt.

Other roles, such as the title company and the state, do not hold ownership interests in the mortgage itself. The title company typically ensures that the title to the property is clear and aids in the transaction between parties, while the state's role is more about regulating property laws and transactions, without direct involvement in the ownership of the mortgage.