Under lien theory, what does the mortgagor retain?

Under lien theory, the mortgagor retains both legal and equitable title to the property. In this framework, when a property is mortgaged, the borrower (mortgagor) does not relinquish ownership rights but rather grants the mortgage lender a lien on the property as security for the loan.

Legal title refers to the formal ownership of the property, allowing the mortgagor to retain control and rights to the property, while equitable title represents the interest or benefit the borrower has in the property, which includes the right to use and enjoy it. Together, both legal and equitable titles mean that the mortgagor still possesses the rights associated with ownership, even though the lender has a secured interest until the mortgage is fully paid off.

In contrast, other theories, such as title theory, may grant the lender the right to take possession of the property, altering where legal and equitable title reside during the mortgage term, which clarifies the significance of lien theory in real estate transactions.