Who is referred to as the trustee in a deed of trust?

In a deed of trust, the trustee is referred to as the neutral third party who holds legal title to the property. This role is essential in the context of real estate financing, as the trustee acts on behalf of both the borrower and the lender. The primary function of the trustee is to safeguard the interests of all parties involved during the loan period.

When the borrower takes out a loan to purchase a property, the deed of trust facilitates the transaction by establishing a legal arrangement in which the property title is transferred to the trustee. This means the borrower retains possession and use of the property while providing the lender with security interests. Should the borrower default on the loan, the trustee has the authority to initiate foreclosure proceedings, enabling the lender to recoup their investment through the sale of the property.

This arrangement contrasts with other forms of property ownership and security, such as mortgages, where the lender may have more direct control over the title. The presence of the trustee helps ensure an impartial process, allowing for a fair resolution in the event that the borrower cannot fulfill their financial obligations.