Is Texas a Lien Theory State?

Is Texas a Lien Theory State?

Yes, Texas is a title theory state, not a lien theory state. In a title theory state, the borrower (mortgagor) gives legal title to the lender (mortgagee) or a trustee through a deed of trust until the loan is paid off. The borrower retains equitable title and the right to use and occupy the property.

In contrast, in a lien theory state, the borrower holds both legal and equitable title, and the lender only has a lien on the property as security for the loan.

Since Texas follows title theory, foreclosure is typically handled through a non-judicial foreclosure process, meaning lenders can foreclose without going through the courts, as long as the deed of trust includes a power of sale clause.