A Missouri real estate instructor is teaching a class on deeds of trust. She lists several characteristics that distinguish Missouri's deed of trust from a traditional two-party mortgage. Which of the following is NOT a characteristic of a Missouri deed of trust?
Correct Answer
A) It gives the lender an equitable lien while the borrower retains full legal title
Option C describes how a traditional mortgage works in a lien-theory state, NOT how a Missouri deed of trust works. In a lien-theory mortgage, the borrower retains full legal title and the lender receives only an equitable lien. In Missouri's deed of trust, the borrower (trustor) actually conveys bare legal title to the trustee at closing. The borrower retains equitable title, but legal title passes to the trustee. Therefore, C is NOT a characteristic of a Missouri deed of trust.
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Related Topics & Key Terms
Key Terms:
Related Concepts
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
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.
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