The doctrine declaring that the mortgagee's interest in the property is limited to the amount of the outstanding obligation is known as:
A) adverse possession.
B) the title theory.
C) the lien theory.
D) equity of redemption.

Question

Quizplus · Accepted Answer

The doctrine that declares that the mortgagee's interest in the property is limited to the amount of the outstanding obligation is known as the lien theory. This means that the mortgagee (lender) has a lien on the property to secure the debt, but the borrower (mortgagor) retains ownership of the property. This is different from the title theory, which holds that the lender holds the title to the property until the debt is repaid, and from adverse possession, which is a legal concept related to acquiring ownership of property through use and occupation. Equity of redemption refers to the borrower's right to redeem the property by paying off the outstanding debt.

The Doctrine Declaring That the Mortgagee's Interest in the Property