In Alabama, when a borrower obtains a mortgage loan to purchase real property, who holds legal title to the property during the loan repayment period?
Correct Answer
B) The borrower retains legal title while the lender holds a lien
Alabama is a mortgage (lien theory) state, not a deed-of-trust state. Under Alabama law, the borrower retains legal title to the property throughout the loan period. The lender does not take title; instead, the mortgage creates a lien against the property as security for the debt. This is codified under Alabama's mortgage law framework (Code of Alabama §35-10-1 et seq.).
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