In a California deed of trust arrangement, what type of title does the trustee hold?
Correct Answer
B) Bare legal title (naked title) as security for the debt
In California's deed of trust, the trustor conveys bare legal title (also called naked title) to the trustee as security. The trustee holds this limited title solely for the purpose of the security arrangement and has no right to possess or use the property. The trustor retains equitable title and possession.
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Related Topics & Key Terms
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Related Concepts
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
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