Under an installment land contract treated as a mortgage in a lien theory state, what is the effect of a buyer default after seven years?

• A. The owner may retake possession immediately due to default.
• B. The owner may regain possession only after a foreclosure sale.
• C. The owner may retake possession through self-help immediately.
• D. The buyer can redeem by paying the remaining installments.

Answer: (B)

In a lien theory system, a mortgage is only a security interest on the property—the title remains with the owner and the creditor has to foreclose to take back the property. When an installment land contract is treated as a mortgage, the buyer’s default does not allow immediate possession to revert to the seller through self-help or quick retaking. Instead, the remedy is foreclosure, which ends the contract and transfers possession (and title, if sold) through a foreclosure sale. Therefore, after seven years of default, the seller may regain possession only after a foreclosure sale has occurred. Self-help re-entry isn’t permitted, and redemption rights, if available, operate within the foreclosure process rather than permitting automatic immediate possession.