Legal title refers to the officially recognized ownership of property, as defined and protected by law. A person or entity with legal title has the full rights to control and transfer the property, subject to any restrictions that may apply.
Title theory states are where the law splits the title of mortgaged property into legal title, held by the lender, and equitable title, held by the borrower. The borrower gains full title to the property upon retiring the mortgage debt. Lenders are granted a more immediate cure for a default than in lien theory states.
