Under Oklahoma law, which of the following is the primary security instrument used by lenders when a borrower obtains a mortgage loan to purchase residential real estate?
Correct Answer
D) Mortgage (lien theory instrument)
Oklahoma is a lien theory state that uses a mortgage as the primary security instrument for real estate loans. Under Oklahoma's lien theory (Title 46 O.S.), a mortgage does not transfer title to the lender—it creates a lien on the borrower's property. The borrower retains title throughout the loan term. This is a critical Oklahoma-specific rule: Oklahoma does NOT use deeds of trust as the standard security instrument, unlike many western states.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Community property is a form of ownership recognized in certain states where property acquired during marriage is considered equally owned by both spouses, regardless of who earned the money or whose name is on the title.
Condominium ownership involves owning a unit of airspace within a multi-unit building plus an undivided interest in the common elements shared with other unit owners. Each unit is separately taxed and financed.
In a cooperative (co-op), the building is owned by a corporation, and residents purchase shares of stock in the corporation that entitle them to a proprietary lease on a specific unit. Residents are shareholders, not property owners.
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