In certain jurisdictions governing real estate transactions, a mortgage is viewed as creating a security interest, rather than conveying actual title to the property. Under this framework, the borrower retains both legal and equitable ownership. The lender, in contrast, possesses a claim against the property, which serves as collateral for the underlying debt. As an example, if an individual obtains financing to purchase a home in such a jurisdiction, they immediately hold the deed, while the mortgage institution holds the right to seize the property if the borrower fails to meet the repayment obligations as stipulated in the mortgage agreement.
This approach offers substantial protections to borrowers. The homeowner maintains control and usage rights throughout the loan term, fostering stability and preventing immediate displacement. Furthermore, it simplifies the foreclosure process in some instances, as legal actions are often required to enforce the security interest, providing homeowners with greater opportunity to resolve financial difficulties. Historically, this perspective on mortgage lending evolved to balance the interests of both lenders and borrowers, ensuring fairer outcomes in property ownership disputes.