Maria purchases a home in Miami and signs a promissory note and mortgage with First National Bank. Under Florida's lien theory, which statement best describes Maria's ownership rights?
Correct Answer
B) Maria retains legal title and the bank holds a security interest
Correct: Under Florida's lien theory, the borrower retains legal title to the property while the lender holds only a security interest (lien). Why not A: This describes title theory states where the lender holds legal title. Why not C: Joint tenancy is not created between borrower and lender. Why not D: Tenancy in common is not established in mortgage relationships.
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Related Topics & Key Terms
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Related Concepts
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
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