Real Estate Principles: Webster Ch. 10

What are 4 advantages of a deed of trust?

1. If borrower defaults, lender takes possession of property and collects rents (foreclosure) 2. Time between default and foreclosure is short 3. The foreclosure takes less time, less expensive, and less complex 4. Title is already in name of trustee 5. Once foreclosure sale takes place, there is not statutory redemption

A deed given as security for the loan against real estate is known as a. naked deed b. consideration deed. c. usury deed d. hypothecated deed

A

What is a reconveyance deed/release deed?

A document used to reconvey title from the trustee back to the property owner once the debt has been paid.

What is a naked title?

A title that the borrower grants to the trustee. - It lacks the rights and privileges usually associated with ownership

Under a deed of trust on real property, the trustee is a. the owner of the property covered by the deed of trust. b. empowered, upon notice of default, to foreclose on the propertu. c. the equitable owner of the property. d. the holder of the grant deed.

B

Who is the trustor?

Borrower - the individual who creates the trust

What is statutory redemption?

Right to redeem AFTER the foreclosure sale, for a period of time fixed by statute.

Under a deed of trust, reconveyance is issued to the grantor (lender) by the ______.

Trustee (third party)

What is a deed of trust?

A deed of trust is a legal document which transfers title to a property to a third-party (trustee) as security for an obligation owed by the trustor (the borrower) to the beneficiary (the lender).

A deed of trust process initially conveys naked title from the ____ to the ____. A. Beneficiary; trustee B. Beneficiary; trustor C. Trustee; trustor D. Trustor; Trustee

D

Who is the beneficiary?

Lender - Holds the deed of trust until funds are repaid

Who is the trustee?

Neutral Third Party

What is the purpose for a deed of trust?

Provide security for the promissory note in place of a mortgage - Immediately grants and conveys qualified title to the trustee