James is a licensed salesperson helping his buyer client understand the financing documents at settlement in Alexandria, Virginia. The buyer asks, 'In a mortgage state, the lender holds the mortgage lien. Who holds title to my property here in Virginia?' James correctly responds that during the loan term, legal title is held by which party?
Correct Answer
B) The trustee, on behalf of the beneficiary
In a Virginia deed of trust, the trustee holds legal title to the property during the loan term on behalf of the beneficiary (lender). The trustor (borrower) retains equitable title — the right to use, occupy, and benefit from the property. Upon full repayment, the trustee reconveys legal title to the trustor via a deed of release. This split between legal and equitable title is a defining feature of the deed of trust structure.
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