In Florida's lien theory system, what is the primary difference between a mortgage and a deed of trust?
Correct Answer
C) Mortgages have two parties while deeds of trust have three parties
The structural difference between a mortgage and a deed of trust is the number of parties: a mortgage is a two-party instrument (borrower/mortgagor and lender/mortgagee), while a deed of trust is a three-party instrument (borrower/trustor, lender/beneficiary, and a neutral trustee). Florida primarily uses mortgages.
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Related Concepts
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
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