Maryland is a “title theory” state, meaning that a mortgage or deed of trust constitutes an actual conveyance of title to the property by the borrower, rather than the mere grant of a lien in the property.
n. A property-law doctrine that a mortgage transfers title to a property to the mortgagee, who holds it until the mortgage has been paid off, at which time title passes to the mortgagor. Only a few American states have adopted this theory, and they are known as title states or title theory jurisdictions.
One may also ask, is Maryland a recourse or nonrecourse state? Maryland is a recourse (deficiency) state. The lender can pursue you for the deficiency. If you can’t afford it, you can file bankruptcy to discharge it, or try to work out a deal for a deed in lieu, to surrender the property in satisfaction of the debt.
which states are title theory states?
These are the title theory states:
- Washington D.C.
Is Ohio a title theory state?
Ohio is known as a lien theory state where the property acts as security for the underlying loan. The document that places the lien on the property is called a mortgage. Non-judicial foreclosure is not available in Ohio.
Who holds title in a title theory state?
In title theory states, the borrower does not actually keep title to the property during the loan term. The seller gives the buyer/borrower a deed to the property but when the borrower signs the mortgage for the loan the borrower gives the title back to the mortgage holder.
Is Arizona a title theory state?
Arizona primarily operates as a title theory state where the property title remains in trust until payment in full occurs for the underlying loan. Foreclosure is a non-judicial remedy under this theory.
What is the difference between a title and a lien?
In title theory or mortgage states title is held in the lender’s name until the final payment is made, when title is passed or re-conveyed to the borrower. In lien theory states, title to the property is held in the name of the borrower with a security interest or lien to the property being granted to the lender.
What is a power of sale?
What Is Power of Sale? Power of sale is a clause written into a mortgage note authorizing the mortgagee to sell the property in the event of default in order to repay the mortgage debt.
Is Alabama a lien theory state?
How are mortgage liens treated in Alabama? Alabama is generally known as a title theory state where the property title remains in trust until payment in full occurs for the underlying loan. The document that secures the title is usually called a deed of trust or mortgage.
What is equitable title in real estate?
In real estate law, “equitable title” refers to a person’s right to obtain full ownership of a property or property interest. This is often contrasted with or used in conjunction with the term “legal title.” Legal title is the actual ownership of the land.
What is an alienation clause?
An alienation clause is a clause in a financial contract that comes into effect when ownership of a specified asset is transferred or a collateral property is sold. Alienation clauses are common in mortgage contracts providing full repayment if real estate property ownership changes.
Is Florida a lien or title state?
The state of Florida is a lien theory state. It’s valuable for a homeowner to know which type of state he lives in because it determines who will hold the title to the property during the length of the mortgage — the buyer or the lender.
What states are non title holding states?
Michigan is one of only nine states that are “non-title holding” states, in which titles are mailed to the owner rather than the lien holder. These states include: Arizona, Kentucky, Maryland, Michigan, Minnesota, New York, Oklahoma, South Dakota and Wisconsin.
Is Arizona a mortgage State?
When someone finances a home, the lender secures the loan to the home by having the borrower sign either a mortgage or a deed of trust. The lender then records the document in the public records were the home is located. Mortgage States and Deed of Trust States. State Mortgage State Deed of Trust State Arizona Y Y Arkansas Y Y California Y Colorado Y
Is Nevada a title theory state?
Nevada primarily operates as a title theory state where the property title remains in trust until payment in full occurs for the underlying loan. Foreclosure is a non-judicial remedy under this theory. The document that secures the title is called a deed of trust.
Is Tennessee a lien theory states?
How are mortgage liens treated in Tennessee? Tennessee is generally known as a title theory state where the property title remains in trust until payment in full occurs for the underlying loan.
Is Delaware a lien theory state?
In states that follow lien theory, the borrower holds the title to the property and the lender’s interests are protected by a mortgage lien. Delaware is a lien theory state. However, in lien theory states, lenders must go through a legal process to take possession of a property or force its sale.
Is NC A lien theory state?
North Carolina is a title theory state so the mortgagee holds legal title to the property. A mortgage is drafted as either a conveyance of the property to the mortgagee (the title theory) or as a lien to secure payment of a debt (the lien theory).