Security instrument for real estate loans, legally infrequent in California, with two parties creating encumbrance. What is it called?
Correct Answer
C) Mortgage
The correct answer is C — a mortgage is precisely defined as a two-party instrument (borrower and lender only) that creates an encumbrance or lien on real property as security for a debt, which exactly matches the question's description. California Civil Code §2920 defines a mortgage as a contract by which specific property is hypothecated for the performance of an act without the necessity of a change of possession, confirming both the two-party structure and the encumbrance nature of the instrument.
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