In which legal theory does the holder of a mortgage own the property until it is paid off?

In Title Theory, the holder of the mortgage, typically the lender, holds legal title to the property until the loan is paid off. This means that while the borrower retains possession of the property, the lender has the right to claim ownership if the borrower defaults on the mortgage. This legal framework places the ownership of the property with the lender, differentiating it from other systems where the borrower maintains more control over the property even in the presence of a mortgage.

This theory underscores the relationship between the lender and borrower, emphasizing the lender's security interest in the property as collateral for the loan. In contrast to other legal theories like Lien Theory, where the borrower maintains ownership and the mortgage serves only as a lien on the property, Title Theory clearly delineates ownership rights, making it integral to the understanding of property management and mortgage agreements in jurisdictions that follow this principle.