In Nebraska real estate financing, which instrument is used as the primary security device to pledge real property as collateral for a loan?
Correct Answer
B) A deed of trust conveying title to a neutral third-party trustee
Under the Nebraska Trust Deeds Act (Neb. Rev. Stat. §§ 76-1001 to 76-1018), the deed of trust is the primary security instrument used in Nebraska real estate transactions. It involves three parties: the trustor (borrower), the trustee (neutral third party who holds legal title), and the beneficiary (lender). This structure enables non-judicial foreclosure (power of sale) and distinguishes Nebraska practice from states that primarily use mortgages.
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Related Topics & Key Terms
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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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