Loan instruments
Deed of trust
A three-party security instrument in which a trustee holds title until the debt is paid
The trustor is the borrower, the beneficiary is the lender, and a neutral trustee holds title as security. Because the trustee already holds it, these states typically allow non-judicial foreclosure under a power of sale, which is much faster than a court proceeding.
How the exam asks about it
Naming all three parties correctly is half the item; connecting it to non-judicial foreclosure is the other half.
Related terms
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