Escrow & Title
What is a 'deed of trust' and how does it differ from a mortgage in terms of the parties involved?
ADeed of trust = 2 parties (borrower and lender); mortgage = 3 parties
BDeed of trust = 3 parties (trustor/borrower, beneficiary/lender, trustee); mortgage = 2 parties (mortgagor and mortgagee)✓ Correct
CBoth have exactly 2 parties; the terminology is different by state
DDeed of trust is only used for commercial property
Explanation
A deed of trust involves three parties: the trustor (borrower), the beneficiary (lender), and the trustee (neutral party who holds bare legal title). A mortgage involves two parties: the mortgagor (borrower) and mortgagee (lender). California primarily uses deeds of trust.
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