In Tennessee real estate financing, which instrument is most commonly used to secure a mortgage loan, and how many parties does it involve?
Correct Answer
A) A deed of trust, involving three parties: the trustor, the trustee, and the beneficiary
Tennessee is a deed-of-trust state. The deed of trust involves three parties: the trustor (borrower), the trustee (a neutral third party who holds legal title), and the beneficiary (the lender). This three-party instrument is the standard security device for real estate loans in Tennessee and enables non-judicial foreclosure under Tenn. Code Ann. § 35-5-101 et seq.
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