Quick answer
A Georgia security deed, also called a deed to secure debt, transfers legal title from the borrower to the lender as security for a debt. The borrower keeps equitable rights and possession. Cancellation of the security deed reconveys title to the grantor. A mortgage is a different instrument: under Georgia law it creates a lien rather than transferring title. A standard security deed has two parties, with no trustee between them.
Decision rule. Separate the promissory note from the collateral instrument. Then identify the parties, whether a trustee exists, who holds legal and equitable title, the default remedy, and what must be recorded at payoff.
Keep two documents separate when you study a financed purchase. The promissory note is the repayment promise. The security deed gives the lender an interest in the real property securing that promise. Calling both documents "the mortgage" in everyday conversation can hide the distinction a practice question asks you to make.
The distinction matters when you identify the parties, locate legal title, or follow the payoff documents. The Georgia outline includes Finance and Closing, but it does not publish a security-deed-only question allocation. Use the examples here to learn the rule, rather than to predict particular PSI questions.
What a security deed actually does
Under O.C.G.A. § 44-14-60, a deed to secure debt passes title to the grantee as security until the secured debt is fully paid. The statute treats that conveyance as legally distinct from a mortgage and reserves the grantor's right to reconveyance on payment.
Two parties matter in the standard security deed:
- The grantor is the borrower, the one conveying title.
- The grantee is the lender, the one receiving it.
A deed of trust adds a trustee to its structure. Do not insert that third party into a standard Georgia security deed simply because both instruments have "deed" in the name.
| Decision point | Georgia security deed | Mortgage in the common lien-theory exam model | Deed of trust in the common exam model |
|---|---|---|---|
| Main parties | Grantor borrower and grantee lender | Mortgagor borrower and mortgagee lender | Trustor borrower, trustee, and beneficiary lender |
| Title or security effect | Legal title passes to the grantee as security; grantor retains equitable rights and possession | Borrower keeps legal title while lender holds a lien | Trustee holds the title interest or power stated by the instrument for the beneficiary |
| Default path | Power-of-sale foreclosure may be used when the deed and Georgia procedure authorize it | Judicial foreclosure is the usual national contrast, subject to state law | Trustee sale may be available under the instrument and state law |
| Payoff | Debt is paid and the security deed is canceled in the public record | Mortgage is satisfied or released | Trustee reconveys or releases as governing law and documents require |
| Fast exam clue | Georgia, grantor, grantee, legal title as security | Mortgagor, mortgagee, lien | Three parties and a trustee |
Do not turn the table into a universal rule for all states. Mortgage and deed-of-trust effects come from the jurisdiction and instrument. The Georgia column is the state-specific answer this site verifies.
The borrower keeps equitable title, which carries the right to occupy the property, to sell it, and to get legal title back on payoff. Under O.C.G.A. § 44-14-67, canceling the security deed after the debt is paid reconveys title to the grantor. There is no separate satisfaction-of-mortgage document to look for.
Exam trap
A question describing the borrower as holding legal title during the loan is describing a lien theory state. In Georgia the borrower holds equitable title and the lender holds legal title. Reverse those two and the whole answer set flips.
A deed of trust can be a plausible distractor because it also uses a deed-like name. Reject it when the facts contain only borrower and lender and no trustee. Reject the promissory note when the question asks what secures the debt, because the note is the repayment promise rather than the real-property collateral instrument.
Title theory, lien theory, and why the label matters
Use the title-theory and lien-theory labels to locate the title interest. Then read the actual instrument and governing law before drawing a conclusion about foreclosure.
| Question | Lien theory | Title theory (Georgia) |
|---|---|---|
| Instrument | Mortgage | Security deed |
| Who holds legal title during the loan | Borrower | Lender |
| What the lender holds | A recorded lien | Legal title |
| How foreclosure may run | Often through the courts | Commonly under a contractual power of sale |
For exam purposes, Georgia belongs in the right-hand column. A nonjudicial sale is not automatic merely because the grantee holds legal title. The security deed must contain a power of sale, and the secured creditor must follow Georgia's notice, advertising, time, place, and manner requirements.
That is covered properly in the Georgia foreclosure walkthrough, because the timing rules are worth their own page.
Three ways to apply the distinction
The practice examples on this page ask you to make three different decisions.
Naming the document. A scenario describes a typical Georgia residential purchase with financing and asks which instrument secures the debt. The expected answer is a security deed. A mortgage, a deed of trust, and a land contract may appear as distractors.
Locating title. A scenario runs for two sentences about a borrower making payments and then asks who holds legal title. During the loan, the lender does.
Sequencing the payoff. The borrower pays the loan in full. What happens next? The security deed is canceled, and cancellation reconveys title. Nothing needs to be re-deeded and no new warranty deed is signed.
Worth knowing
Georgia also uses a bond for title in some seller-financed deals, where the seller keeps legal title until the buyer finishes paying. It behaves like a land contract. It is not the same thing as a security deed and § 44-14-60 says a bond for title is not needed when the deed shows on its face that it secures a debt.
The vocabulary that trips people up
A handful of words do a lot of work in these questions.
- Equity of redemption is the borrower's right to satisfy the debt before the foreclosure sale. Do not confuse it with a statutory redemption period after a completed nonjudicial sale.
- Power of sale is contractual authority for a sale outside court when the creditor also follows the applicable Georgia procedures. Holding legal title alone does not supply that authority.
- Confirmation is the separate court proceeding a lender must go through if it wants a deficiency judgment after the sale.
If you want these alongside the rest of the state vocabulary, the glossary entry for security deed and the title theory entry both carry the trap the exam sets with them.
Check yourself
1. A Peachtree City buyer finances a home purchase. Which instrument does the lender take to secure the debt?
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Answer: C. The security deed is the ordinary Georgia real-property security instrument described here. A mortgage creates a lien rather than passing title. A deed of trust introduces a trustee. A bond for title describes a different seller-financing arrangement, rather than this lender's security deed.
2. During the term of a Georgia home loan, who holds legal title to the property?
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Answer: B. Legal title passes to the lender under the security deed. The borrower retains equitable rights and possession, which makes A tempting but incorrect. C adds a trustee absent from this instrument. D confuses the office recording the document with the party holding the security title.
3. A Savannah homeowner makes the final payment on a loan secured by a security deed. What returns legal title to the homeowner?
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Answer: B. Section 44-14-67 gives cancellation of the security deed the effect of reconveying title to the grantor. A new warranty deed is not required, so A is unnecessary. The original seller does not hold the lender's security title, which rules out C. D invents a required court order for this ordinary payoff.
4. Which fact best identifies a state as a title theory state?
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Answer: C. The location of legal title is the distinction asked for. A describes a foreclosure procedure, which does not by itself establish the title model. B describes the usual lien-theory model. D names an instrument but does not tell you its legal effect under the jurisdiction's law.