What title does the mortgagor hold while the mortgage lien is in place?

In the context of a mortgage, the mortgagor—the borrower—holds what is known as equitable title while the mortgage lien is in place. This means that the mortgagor has the right to use and benefit from the property, essentially enjoying the benefits of ownership, even though they do not hold legal title until the mortgage is fully paid off.

Equitable title provides the mortgagor with the right to eventually claim full ownership of the property, subject to the existing mortgage lien. The lender holds legal title, which grants them rights over the property primarily to secure their financial interest in the event that the borrower defaults. As such, the borrower operates under equitable title, signifying that they have a beneficial interest in the property and can act as its owner, despite the outstanding mortgage debt.

This distinction is crucial within real estate transactions, as it affects the rights and obligations of both the lender and the borrower, particularly in situations such as foreclosure or property sale. Understanding the nature of equitable title helps illustrate the balance of interests in property ownership during the time that a mortgage lien is in effect.