In Georgia, a security deed is:
Question & Answer
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The same as a mortgage
A is incorrect because while a security deed functions similarly to a mortgage in securing a loan, Georgia law treats them differently. A mortgage creates a lien on the property, whereas a security deed actually transfers legal title to the lender, making it a distinct legal instrument in Georgia.
A deed that transfers title to the lender as security
Used only for commercial property
C is incorrect because security deeds are not limited to commercial property. They are commonly used for both residential and commercial real estate transactions throughout Georgia as the primary financing instrument.
Not recognized in Georgia
D is incorrect because security deeds are not only recognized but are the predominant financing instrument in Georgia, used in the majority of real estate transactions to secure repayment of loans.
Why is this correct?
B is correct because a security deed is specifically defined as a deed that transfers legal title to the lender as security for a loan, while the borrower retains equitable title. This is the core characteristic that distinguishes it from other security instruments.
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