Why is arizona a title theory state?

Arizona is a title theory state because it follows the title theory of mortgages, which means that when a mortgage is executed, legal title to the mortgaged property is transferred to the mortgagee (lender) until the mortgage is paid in full. In other words, the lender holds legal title to the property until the borrower fulfills their obligation to repay the loan.

This is in contrast to a lien theory state, where the borrower retains legal title to the mortgaged property and the mortgagee only has a lien on the property as security for the loan. In a lien theory state, the borrower is considered to be the owner of the property and can sell or transfer the property without the consent of the lender, as long as the mortgage is paid off.

Arizona is one of the 22 title theory states in the United States, while the other 28 states are lien theory states. The choice between title theory and lien theory is a matter of state law and can affect the rights and obligations of both the lender and the borrower in a mortgage transaction.