Under a Maryland deed of trust, which party holds legal title to the property during the loan repayment period?
Correct Answer
A) The trustee, who holds title on behalf of the lender
In a Maryland deed of trust, the borrower (trustor) conveys legal title to a neutral third-party trustee, who holds that title on behalf of the lender (beneficiary) for the duration of the loan. Once the loan is fully repaid, the trustee reconveys title back to the borrower. This three-party structure is what distinguishes a deed of trust from a traditional mortgage.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
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.
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