If the debtor fails to repay the debt, the creditor can sell the property. The possession of the property remains with the borrowers. It is only the transfer of an interest in a specific mortgage property. The securities which are generally mortgaged as a cover for an advance are title deeds, life policies, stock and shares.
A pledge is an actual delivery of the movable property to the lender as a security for a loan. The ownership, however, remains with the borrowers. The difference is that in case of mortgage, the possession of property remains in the hand of borrower. In case of pledge the lender is entitled to the exclusive possession of the property till the debit is repaid.
A lien is a right to retain property till the debt is repaid. It is a legal claim on the securities which come in to the banker's hands in the ordinary course of business.The lien arises by implication of law from certain situations. While the mortgage and pledge arises from a special agreement between a borrower and lender.