Which mortgage theory permits the mortgagee to take possession immediately upon default?

• A. Lien theory
• B. Intermediate title theory
• C. Title theory
• D. None of the above

Answer: (C)

The key idea is how mortgage theories handle who holds title and who can take possession when default happens. In a title theory, the lender actually holds legal title to the property as security for the loan. Because title is in the mortgagee’s hands, the lender has the right to take possession immediately upon default, rather than waiting for foreclosure. This contrasts with lien theory, where the borrower keeps title and possession and the lender must foreclose to recover the property. The intermediate theory sits between these two, not granting automatic possession right at default. So immediate possession upon default is a feature of title theory.