Which security instrument is used as the primary financing tool in Montana real estate transactions, rather than a traditional mortgage?
Correct Answer
B) Deed of trust
Montana uses a deed of trust as the primary security instrument under the Montana Trust Indenture Act (MCA Title 71, Chapter 1, Part 3). A deed of trust involves three parties — the trustor (borrower), the trustee, and the beneficiary (lender) — and enables non-judicial foreclosure, which is faster and less costly than judicial foreclosure.
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Related Topics & Key Terms
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Related Concepts
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.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
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