David is buying a property in Weld County, Colorado using a conventional loan. His lender requires a deed of trust as the security instrument. At closing, the deed of trust names three parties. Which of the following correctly identifies all three parties to a Colorado deed of trust?
Correct Answer
D) Trustor (borrower), trustee (Public Trustee), and beneficiary (lender)
A Colorado deed of trust involves three parties: (1) the trustor — the borrower who conveys bare legal title to secure the loan; (2) the trustee — the county Public Trustee, who holds that bare legal title and has the power to sell the property upon default; and (3) the beneficiary — the lender, who holds the promissory note and benefits from the security arrangement. This three-party structure under C.R.S. § 38-38-101 is what distinguishes a deed of trust from a two-party mortgage.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
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