An agreement whereby a borrower agrees to give a lien on the property she is purchasing to the lender in order to secure payment of the loan should she default.

• A. Deed
• B. Escrow
• C. Title
• D. Mortgage

Answer: (D)

In real estate lending, the key idea is securing the loan with a property interest. A mortgage is the instrument that creates a lien on the property for the lender, giving them a legal claim to the property if the borrower defaults. This lien protects the lender and allows foreclosure to recover the outstanding debt.

A deed, on the other hand, transfers ownership of the property from one person to another, not a security interest for a loan. Escrow involves holding funds or documents until certain conditions are met, not creating a loan security. Title is the legal document proving ownership, which may show liens, but it does not itself establish the loan security.

So the agreement described—granting a lien on the property to secure repayment of the loan—is a mortgage.