Which security instrument does Maine primarily use to secure a mortgage loan?
Correct Answer
B) Mortgage under lien theory, where the borrower retains title and the lender holds a lien
Maine is a lien theory state. When a borrower takes out a mortgage loan, the borrower retains legal title to the property while the lender holds a lien as security. This differs from title theory states, which use deeds of trust where a third-party trustee holds title during the loan term.
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Related Topics & Key Terms
Related Topics:
Key Terms:
Related Concepts
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
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.
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