A Florida borrower asks whether signing a mortgage transfers legal title to the lender until repayment. Which statement is inconsistent with the lien-theory framework?
Correct Answer
D) The lender holds legal title until the loan is repaid
Correct: D - The lender holds legal title until the loan is repaid. In lien theory states, the lender does NOT hold legal title - this is a characteristic of title theory states. Why not A: This option is incorrect because "Foreclosure requires judicial proceedings" does not match the rule tested by the question. The correct answer is "The lender holds legal title until the loan is repaid". In lien theory states, the lender does NOT hold legal title - this is a characteristic of title theory states. Why not B: This option is incorrect because "The lender holds a security interest in the property" does not match the rule tested by the question. The correct answer is "The lender holds legal title until the loan is repaid". In lien theory states, the lender does NOT hold legal title - this is a characteristic of title theory states. Why not C: This option is incorrect because "The borrower retains legal title to the property" does not match the rule tested by the question. The correct answer is "The lender holds legal title until the loan is repaid". In lien theory states, the lender does NOT hold legal title - this is a characteristic of title theory states.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
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