When land owners use their land as security for a loan, the encumbrance created is called

A special security is not a recognized legal term in real estate transactions. Instead, it may refer to various forms of collateral or guarantees but does not specifically describe the encumbrance created when property is used as loan security. Therefore, this choice does not accurately represent the legal mechanism involved in securing a loan with real estate.

An involuntary lien typically arises from legal actions, such as unpaid taxes or court judgments, rather than from a voluntary agreement between a borrower and lender. Since using land as security for a loan is a voluntary transaction, this choice misrepresents the nature of the encumbrance being described.

A gratuitous privilege implies an advantage or benefit granted without any obligation or payment, which does not apply to the context of securing a loan with property. This term lacks legal standing in real estate and does not accurately describe the nature of encumbrances in loan agreements.