In Nevada real estate transactions, which instrument is used as the primary security device for a real property loan rather than a mortgage?
Correct Answer
B) A deed of trust, which involves three parties: trustor, trustee, and beneficiary
Nevada uses the deed of trust as its primary security instrument for real property loans, as established under NRS Chapter 107. A deed of trust involves three parties: the trustor (borrower), the trustee (a neutral third party who holds bare legal title), and the beneficiary (lender). This structure enables non-judicial foreclosure through a trustee's sale, which is faster and less expensive than judicial foreclosure.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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