Lien-Theory States

States whose laws give a lien on property to secure debt; contrasted with Title-Theory States in which the lender becomes the title owner. In either case the borrower has the right to use and enjoy the property in the absence of default. In the event of default, lenders may foreclose.

States whose laws give a Lien on property to secure debt. Contrasted with Title Theory States in which the lender becomes the Title owner. In either case the borrower has the right to use and enjoy the property in the absence of Default in the event of default, lenders may Foreclose.
Example: After Closing the sale of a home in a lien-theory state, the lender acquires a First Mortgage and may foreclose upon certain default.