In Maryland, which instrument is most commonly used as the primary security instrument in a residential real estate transaction?
Correct Answer
B) A deed of trust, which conveys legal title to a trustee to secure the lender's interest
Maryland primarily uses a deed of trust (also called a deed of trust in the nature of a mortgage) as the security instrument in residential real estate transactions. Under this arrangement, the borrower (trustor) conveys legal title to a trustee, who holds it as security for the lender (beneficiary). This structure allows for both judicial and non-judicial foreclosure processes, with the non-judicial trustee's sale being far more common and efficient in Maryland practice.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Fee simple absolute is the highest and most complete form of property ownership, giving the owner unrestricted rights to use, possess, enjoy, and dispose of the property. It is of unlimited duration and fully inheritable.
Community property is a system where property acquired during a marriage is owned equally by both spouses.
A freehold estate represents ownership of real property with an indefinite duration.
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