In Massachusetts, a mortgage transfers legal title to the mortgagee as security, subject to the borrower's right to redeem by satisfying the secured obligation. Which mortgage-law theory does this illustrate?
Correct Answer
C) Title theory
C. The described Massachusetts rule illustrates title theory. In Eaton, the court describes legal title passing as security for the debt. That interest is defeasible upon performance; the borrower retains an equity of redemption. This is not an outright unconditional sale. Scope and exceptions: This state-law example does not classify every state or independently determine foreclosure procedure. The court separately analyzes statutory power-of-sale requirements; title theory alone is not permission to foreclose. Source: Eaton, 462 Mass. 569, 575–576 and 579–580 (2012), reproduced judicial opinion — https://law.justia.com/cases/massachusetts/supreme-court/volumes/462/462mass569.html
Why This Is the Correct Answer
C. The described Massachusetts rule illustrates title theory. In Eaton, the court describes legal title passing as security for the debt. That interest is defeasible upon performance; the borrower retains an equity of redemption. This is not an outright unconditional sale. Scope and exceptions: This state-law example does not classify every state or independently determine foreclosure procedure. The court separately analyzes statutory power-of-sale requirements; title theory alone is not permission to foreclose.
Why the Other Options Are Wrong
Option A: Lien theory
The described present transfer of legal title is not merely a lien.
Option B: Equitable conversion under a purchase contract
The question concerns mortgage security, not the purchaser’s interest under a sale contract.
Option D: Intermediate theory, under which title transfers only upon default
The facts do not defer the title transfer until default.
Exam Tip
Distinguish the security interest’s legal form from the procedures for enforcing it.
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