Which of the following statements about both the Mortgage and Deed of Trust is false?

The statement that both the Mortgage and Deed of Trust allow borrower property rights to be given to the lender is misleading. While both instruments are used in real estate financing and create a lien on the property, the nature of the borrower’s rights differs between them.

In a Mortgage, the borrower retains ownership of the property while the lender holds a lien as security for the loan. This means the borrower can live in and control the property as long as they adhere to the mortgage terms, including making timely payments. If the borrower defaults, the lender has the right to foreclose, but the property rights remain with the borrower until such action is taken.

On the other hand, a Deed of Trust involves three parties: the borrower (trustor), the lender (beneficiary), and a trustee. The borrower conveys a security interest to the trustee, who holds it for the benefit of the lender. While the lender does gain a security interest in the property, the borrower does not give away their property rights outright; the rights remain with the borrower until they default, at which point the trustee can initiate foreclosure.

Hence, saying both allow for borrower property rights to be given to the lender oversimplifies and mischaracterizes the legal nature of these two instruments