A closing attorney asks an intern to separate files by the number of core parties named in the security instrument. Which file should go into the three-party category?
Correct Answer
B) A deed of trust naming a trustor, trustee, and beneficiary
A deed of trust commonly involves three core parties: the trustor or borrower, the trustee, and the beneficiary or lender. That three-party structure distinguishes it from an ordinary two-party mortgage.
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Related Topics & Key Terms
Key Terms:
Related Concepts
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
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