Under which deed category might there be a disguised mortgage if an obligation is created at or before the transfer?

• A. A disguised mortgage
• B. Valid sale with no security
• C. An installment land contract
• D. A lease

Answer: (A)

In real estate law, a disguised mortgage happens when the transaction is labeled as a sale, but in substance it secures a debt with the property. The key clue is that an obligation to repay is created at or before the transfer, so the deed’s form is being used to secure the loan rather than to convey unencumbered ownership.

This makes the proper category a disguised mortgage because the transfer functions as security for a debt, not as a clean sale with clear title free of debt. The other options don’t fit as well: a valid sale with no security lacks any debt to secure, an installment land contract involves a payment plan and a distinct form of sale rather than a loan secured by the title, and a lease does not transfer ownership at all.