In a loan secured by property, who has the security interest in the property?

In a loan secured by property, who has the security interest in the property?

• A. Mortgagor
• B. Debtor
• C. Lienholder
• D. Mortgagee

Answer: (D)

When a loan is secured by property, the lender’s claim on the property is a lien formed in favor of the lender. The party who holds that security interest is the mortgagee—the lender who provides the funds and receives the mortgage, which creates the lien. The borrower, who pledges the property, is the mortgagor and remains the owner but uses the property as security for the loan. The term debtor is another way to refer to the borrower, while lienholder is a broad term that could describe any entity with a lien, but the specific security interest created by this loan belongs to the mortgagee.

When a loan is secured by property, the lender’s claim on the property is a lien formed in favor of the lender. The party who holds that security interest is the mortgagee—the lender who provides the funds and receives the mortgage, which creates the lien. The borrower, who pledges the property, is the mortgagor and remains the owner but uses the property as security for the loan. The term debtor is another way to refer to the borrower, while lienholder is a broad term that could describe any entity with a lien, but the specific security interest created by this loan belongs to the mortgagee.