When a trust deed is used as a security instrument in Oregon, who holds legal title to the property during the loan repayment period?
Correct Answer
D) The trustee holds bare legal title while the grantor retains equitable title.
Under Oregon's trust deed structure (ORS Chapter 86), when the grantor (borrower) executes a trust deed, they convey bare legal title to the trustee as security for the loan. The grantor retains equitable title, meaning they retain the right to use, occupy, and benefit from the property. The trustee holds legal title in a passive capacity only for the purpose of conducting a trustee's sale if the grantor defaults. Upon full repayment, the trustee reconveys legal title to the grantor.
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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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