The mortgage generally secures the loan by creating what on the property?

• A. Deed
• B. Covenant
• C. Title
• D. Lien

Answer: (D)

Securing a loan with real estate is done through a lien. A lien is a legal claim against the property that gives the lender the right to be repaid from the property's value if the borrower defaults. The mortgage itself is the instrument that creates this security interest and is recorded in public records, signaling that the lender has a right to the property if payments aren’t made. This arrangement does not transfer ownership to the lender; the borrower remains the owner while the lien exists, though the lender can pursue foreclosure to recover what is owed if needed. Deed, title, and covenant serve different roles: a deed transfers ownership, a title is evidence of ownership, and a covenant is a promise or restriction that may appear in a deed or contract but does not secure the loan. Because the mortgage establishes a security interest in the property to protect the lender, a lien is the best description of how the loan is secured.