quality:correction, linguistic:voice_change
Intermediate theory

Under what has come to be called the "intermediate theory" of mortgages, a mortgage is viewed as creating a lien on the mortgaged property until such a time as an event of default occurs pursuant to the loan contract. After such a time, the same mortgage is construed under title theory. This is accomplished by the inclusion of a stipulation within the loan contract to the effect that the borrower is allowed to retain legal title to the collateralized property with the express agreement that the lender may foreclose in a non- or extrajudicial manner if the borrower defaults on the loan.