Lenders that use deeds of trust are called

Study for the California Escrow Exam. Dive into detailed content with flashcards and multiple choice questions, accompanied by explanations and hints. Ensure your success on test day!

Multiple Choice

Lenders that use deeds of trust are called

In a deed of trust arrangement, three parties are involved: the trustor (the borrower), the trustee (a neutral party who holds title), and the beneficiary (the lender). The beneficiary is the party who benefits from the trust and holds the note secured by the deed of trust; they direct the trustee and would initiate foreclosure by sale if the loan terms are breached. That makes the lender in a deed of trust the beneficiary. By contrast, in a mortgage the lender is called the mortgagee and the borrower the mortgagor, with no trustee involved.

In a deed of trust arrangement, three parties are involved: the trustor (the borrower), the trustee (a neutral party who holds title), and the beneficiary (the lender). The beneficiary is the party who benefits from the trust and holds the note secured by the deed of trust; they direct the trustee and would initiate foreclosure by sale if the loan terms are breached. That makes the lender in a deed of trust the beneficiary. By contrast, in a mortgage the lender is called the mortgagee and the borrower the mortgagor, with no trustee involved.

More practice questions