During a pre-licensing class, an instructor explains the parties involved in a Maryland deed of trust. A student asks how many parties are involved in a deed of trust compared to a traditional mortgage. Which answer correctly identifies the parties in each instrument as used in Maryland?

Correct Answer

A) A mortgage has two parties (mortgagor and mortgagee); a deed of trust has three parties (trustor, trustee, and beneficiary)

A traditional mortgage involves two parties: the mortgagor (borrower) and the mortgagee (lender). A Maryland deed of trust involves three parties: the trustor (borrower who conveys title), the trustee (neutral third party who holds legal title), and the beneficiary (lender who holds the beneficial interest). This three-party structure is the defining feature of a deed of trust and enables non-judicial foreclosure.