California Real Estate SalespersonFinancingEasy
In a California deed of trust, which party holds bare legal title to the property solely for the purpose of reconveying it or conducting a foreclosure sale if the borrower defaults?
- ABeneficiary
- BTrustee
- CMortgagee
- DTrustor
Show answer & explanationAnswer & explanation
Correct answer: B. Trustee
In a deed of trust, the trustor (borrower) conveys bare legal title to a neutral third party, the trustee, who holds it as security for the beneficiary (lender) and can reconvey it or sell it at foreclosure.
Why the other options are wrong
- A. The beneficiary is the lender who holds the promissory note.
- C. Mortgagee is a term used in mortgage transactions, not the deed-of-trust structure.
- D. The trustor is the borrower who conveys title and retains equitable/possessory interest.
Deed of Trust Parties
A deed of trust involves three parties: the trustor (borrower), the trustee (neutral title holder), and the beneficiary (lender).
- Trustor = borrower who signs the note and deed of trust
- Trustee = holds bare legal title for security purposes
- Beneficiary = lender who receives loan payments
Memory trick: TTB: Trustor gives Title to Trustee for Beneficiary's benefit.