Finance
Alaska is classified as a lien theory state. This means that when a borrower obtains a mortgage:
AThe lender holds title to the property until the loan is paid off
BThe borrower retains title and the lender holds a lien against the property✓ Correct
CTitle is held by a neutral trustee until the loan is repaid
DThe borrower and lender share title equally until the debt is satisfied
Explanation
As a lien theory state, Alaska law provides that the borrower retains legal title to the property when they obtain a mortgage. The lender holds a lien (mortgage lien) as security for the loan. In title theory states, the lender holds title. In deed of trust states, a trustee holds title.
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