FinanceIntermediateCalifornia Exam

A deed of trust in California differs from a mortgage primarily because:

AA deed of trust has lower interest rates, per standard amortization and lending convention
BA deed of trust involves three parties and allows non-judicial foreclosureCorrect
CA mortgage cannot be used for residential property, under standard California mortgage lending practice
DA deed of trust requires court approval to create, as typically calculated in residential loan underwriting

Why A deed of trust involves three parties and allows non-judicial foreclosure Is Correct

Answer B: A deed of trust involves three parties and allows non-judicial foreclosure

A deed of trust involves three parties: trustor (borrower), trustee (neutral third party), and beneficiary (lender). The key advantage is non-judicial foreclosure (trustee's sale) which is faster than judicial foreclosure required for mortgages.

Exam Tip: Finance

Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.

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