Finance
Arkansas is a 'lien theory' state. This means that when a borrower takes out a mortgage:
AThe lender holds legal title until the loan is repaid
BThe borrower retains legal title and the lender holds a lien on the property as security✓ Correct
CThe property is placed in a trust until payoff
DThe lender must record a deed of trust instead of a mortgage
Explanation
In a lien theory state like Arkansas, the borrower retains legal title to the property. The lender does not hold title — instead, the mortgage creates a lien (security interest) on the property until the loan is paid off.
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