What does Lien Theory imply about property ownership during a mortgage?

Lien Theory implies that the borrower retains legal ownership of the property throughout the mortgage loan duration, even while there is a lien placed against the property by the lender. Under this framework, when a borrower takes out a mortgage, they hold the title and have the right to occupy, use, and sell the property, although the lender has a secured interest in the property through the lien. This means that while the lender has the right to be repaid, they do not take possession of the property unless there is a default and subsequent foreclosure.

The other options represent interpretations of property ownership that do not align with Lien Theory. The idea that the lender owns the property during the loan period or that ownership is shared doesn't hold true because the lender's role is primarily as a secured creditor rather than a co-owner. Additionally, saying the lender has no claim to the property until foreclosure overlooks the legal right the lender holds via the lien for the duration of the loan. In summary, Lien Theory makes it clear that the borrower remains the owner throughout the mortgage process, which is key to understanding real estate financing in Texas.