California's deed of trust involves three parties. The trustee in a deed of trust is:
Correct Answer
B) A neutral third party who holds bare legal title
In California's deed of trust system, the trustee is a neutral third party who holds bare legal title to the property as security for the loan.
Why This Is the Correct Answer
In California's deed of trust system, the trustee is a neutral third party who holds bare legal title to the property as security for the loan.
Why the Other Options Are Wrong
Option A: The borrower
The borrower is the trustor, not the trustee. The trustor conveys bare title to the trustee.
Option C: The lender
The lender is the beneficiary under a deed of trust, not the trustee holding bare legal title for foreclosure purposes.
Option D: The real estate agent
Real estate agents are not involved in the deed of trust structure.
Memory Technique
CA -> ca-foreclosure-property-servicing-and-debt-collection
Exam Tip
Legacy California general items should be used sparingly; they are kept officially supported for existing content but new MLO growth should focus more on DFPI/DRE, CFL, CRMLA, covered-loan, and usury rules.
Common Mistakes to Avoid
- -Using a national baseline answer when California has agency-specific DFPI or DRE requirements
- -Confusing CFL, CRMLA, covered-loan, usury, servicing, and DRE endorsement rules
- -Relying on legacy California state-exam or education assumptions instead of current NMLS source pages
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