Finance
In Delaware, a deed of trust differs from a mortgage primarily because:
AA deed of trust requires court foreclosure
BA deed of trust involves three parties: borrower, trustee, and lender✓ Correct
CA mortgage cannot be used for residential property
DA deed of trust cannot be used for commercial property
Explanation
A deed of trust involves three parties: the borrower (trustor), a neutral third-party trustee who holds title, and the lender (beneficiary). Mortgages involve only two parties.
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Key Terms to Know
Deed of Trust
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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