In a deed of trust, who holds the title to the property?

In a deed of trust, the title to the property is held by a trustee until the loan is paid off. This arrangement involves three parties: the borrower (trustor), the lender (beneficiary), and the trustee. The trustee acts as an intermediary who holds the legal title to the property on behalf of the lender until the borrower fulfills the obligations of the loan, such as making all payments. Once the borrower pays off the loan, the trustee transfers the title to the borrower, ensuring that the borrower has full ownership.

This system is designed to provide a level of security for the lender while allowing the borrower to use the property during the loan period. It contrasts with mortgages, where the borrower typically retains the title, subject to the lender's lien for the loan amount. The other choices do not accurately reflect the role of the parties involved in a deed of trust, as the title is not solely with the lender, the borrower, or the government.