Which term describes the type of ownership where the borrower retains title to the property?

The concept of ownership where the borrower retains title to the property is known as mortgage theory. In this scenario, the borrower holds the legal title to the property, while the lender has a security interest in the property through the mortgage. This means that even though the lender has the right to foreclose on the property if the borrower defaults, the borrower continues to own the property and can occupy it, as long as they adhere to the terms of the mortgage agreement.

In mortgage theory, the property owner (or borrower) keeps the title during the loan period. This distinguishes it from title theory, where the lender holds the title while the borrower has equitable interest in the property. Understanding this distinction is crucial in real estate transactions, especially in terms of property rights and obligations during the mortgage period.