During a pre-license class in Virginia, a student asks: 'In a deed of trust, the borrower gives legal title to the trustee. What does the borrower actually keep?' The instructor correctly explains that the borrower retains which type of title?
Correct Answer
B) Equitable title, representing the right to use and benefit from the property
In a Virginia deed of trust, the trustor (borrower) conveys legal title to the trustee but retains equitable title. Equitable title represents the borrower's right to use, occupy, and benefit from the property, as well as the right to regain full legal title upon repayment of the loan. This split between legal title (held by the trustee) and equitable title (retained by the trustor) is a fundamental characteristic of the deed of trust structure.
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