Patricia purchases a home in Kansas City, Missouri and obtains a loan from First Missouri Bank. The bank's attorney prepares the standard security instrument used in Missouri. Which of the following statements accurately describes what happens to the legal title to Patricia's property at closing?
Correct Answer
C) Legal title is transferred to a neutral trustee to hold as security for the loan
Under Missouri's deed of trust system (RSMo §§ 443.290–443.430), when Patricia executes a deed of trust, she (as trustor) conveys bare legal title to a neutral third-party trustee. The trustee holds this title as security for the loan on behalf of the beneficiary (First Missouri Bank). Patricia retains equitable title and possession. Upon full repayment, the trustee reconveys legal title to Patricia.
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