Escrow & Title (alternative)
A Maryland deed of trust differs from a traditional mortgage because:
AA deed of trust has three parties (trustor, trustee, beneficiary) and may allow non-judicial foreclosure✓ Correct
BA deed of trust is the same as a mortgage in all respects
CA deed of trust cannot be used for residential properties
DA deed of trust provides no security to the lender
Explanation
A deed of trust has three parties (borrower/trustor, neutral trustee, lender/beneficiary) and in some states allows non-judicial (power of sale) foreclosure. In Maryland, foreclosure under a deed of trust still requires judicial process.
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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).
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
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.
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