Property Ownership
In New Mexico, which of the following creates a 'lien theory' state rather than a 'title theory' state for mortgages?
ANew Mexico is a lien theory state for mortgages, where the lender holds a lien but the borrower retains legal title✓ Correct
BNew Mexico is a title theory state where the lender holds legal title during the loan
CNew Mexico uses trust deeds exclusively with no mortgage concept
DNew Mexico has no distinction between lien and title theory
Explanation
New Mexico is primarily a deed of trust state (a form of title theory for deeds of trust, where the trustee holds title), but when mortgages are used, NM follows lien theory — the borrower retains title and the lender holds a lien. For deeds of trust, the trustee holds bare legal title.
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