To pledge real property as security for a loan, a borrower executes a legal instrument known as either a mortgage -or- deed of trust as evidence of the  promise to repay a debt.

A "mortgage" is a two party agreement between the "mortgagor" (owner/borrower) and "mortgagee"  (lender)  whereby the owner conveys a security interest in his property to the lender. 

A "deed of trust" is very similar to a mortgage but involves three parties instead of two.  The "mortgagor" grants the security interest to a "trustee" who holds the real property in trust for a  "beneficiary" i.e., the lender.  

Both instruments secure the repayment  of  the debt through a document known as the "mortgage note", or simply the "I.O.U." 

Title Theory Vs. Lien  Theory

States vary as to how mortgage liens are actually perfected and the process depends upon whether the state is a title theory or lien theory state.

In "title theory" states, actual "legal title"  to the property temporarily passes to a trustee to secure the debt.   The borrower (grantor), retains possession rights and "equitable title" and has full use of the property for the mortgage term.  When the loan is paid off, legal title is restored without the necessity of a reconveyance.   Exp. North Carolina is a "title theory" state.

In "lien theory" states, the lender (mortgagee)  places a "lien" on the mortgaged real property  while the borrower retains both "equitable" and "legal" title.  

Most states follow the lien theory concept however, except for technical differences, the distinction between the two has little impact in most real estate transactions.