All of the following clauses are commonly found in a California deed of trust EXCEPT:
Correct Answer
A) Defeasance clause that nullifies the lien upon full repayment of the debt
A defeasance clause nullifies a lien upon full repayment and is associated with mortgage instruments, not deeds of trust. California deeds of trust accomplish the same purpose through a reconveyance clause, under which the trustee reconveys bare legal title back to the trustor once the debt is satisfied. These are two distinct instruments with distinct mechanisms.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
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