Florida · Chapter 12 of 19
Residential Mortgages
Lien vs. title theory, the note and mortgage, LTV, PITI, points, assignment, estoppel, foreclosure, and buying subject to or assuming a mortgage.
35-minute read · Built for the Sales Associate Exam
Lien Theory: Florida's Approach
Florida is a lien theory state: a mortgage creates a lien on the property, and the borrower keeps both legal title and possession. In title theory states the lender holds title until the loan is paid. The borrower who gives the mortgage is the mortgagor; the lender who receives it is the mortgagee. Exam trap: the -or/-ee endings follow the mortgage document, not the money. The borrower gives the mortgage (mortgagor) even though the lender gives the cash. Because Florida is a lien theory state, a lender that wants possession after default must go through a court foreclosure.
Fla. Stat. §697.02
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