In what way does an Equitable Mortgage differ from a Legal Mortgage?

An equitable mortgage is characterized by the fact that it does not transfer legal title of the property to the mortgagee; instead, it creates a claim or right in relation to the property while retaining ownership with the mortgagor. This distinguishes it from a legal mortgage, where the title is formally transferred as security for the loan. For an equitable mortgage, the lender has a right to enforce the agreement and can take action to secure their interests, but they do not hold legal title to the property itself.

This structure allows for greater flexibility in arrangements between the parties involved. The mortgagor may still retain rights to the property and may continue to enjoy its use, as long as they adhere to the terms set forth in the equitable mortgage agreement. This aspect is crucial in understanding how equitable mortgages operate within the framework of property rights and obligations.

In contrast, the other statements are misleading: the securitization of debt can occur in various forms of mortgages, including legal ones, and an equitable mortgage is not a lease agreement. Furthermore, equitable mortgages are indeed recognized by law, albeit they may not offer the same protections as a legal mortgage.