In a Virginia deed of trust, which party holds legal title to the property during the loan repayment period?
Correct Answer
C) The trustee, who is a neutral third party
In a Virginia deed of trust, the trustee holds legal title to the property on behalf of the beneficiary (lender) during the loan term. The trustor (borrower) conveys legal title to the trustee at closing. If the borrower defaults, the trustee has the authority to conduct a non-judicial foreclosure sale under the power of sale clause. Once the loan is repaid, the trustee reconveys title to the borrower.
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Related Topics & Key Terms
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Related Concepts
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
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%.
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