A property deed cannot be directly mortgaged because it serves as proof of ownership rather than an asset that can be lent against. Mortgages involve creating a lien on the property itself, not the deed. The deed is a legal document transferring title, while the mortgage is a secured loan against the property's equity.

In the United States, property law distinguishes between the deed (title) and the mortgage (lien). When a mortgage is secured, the lender gains a legal claim on the property until the loan is repaid. The deed remains with the property owner or a title company, ensuring clear ownership. For example, the Consumer Financial Protection Bureau (CFPB) reports that 75% of U.S. mortgages in 2021 were conventional loans, which require a lien on the property, not the deed. The Federal Reserve’s 2022 data shows home equity loans account for 12% of total consumer loans, reflecting that equity is leveraged through liens, not deeds. Legally, the Uniform Deed Act and state laws (e.g., California’s Civil Code § 710) reinforce that deeds cannot be collateralized directly. Instead, lenders use the property’s value as collateral, with the mortgage note and deed of trust recorded separately. This structure minimizes confusion in title transfers and ensures lenders can enforce repayment through foreclosure if needed. Thus, the deed’s role is declarative, while mortgages function as financial instruments tied to the property’s value.