Georgia The CE Shop State Practice Exam

In a deed of trust, the beneficiary is the lender. This type of security instrument involves three parties: the borrower (trustor), the lender (beneficiary), and a neutral third party (trustee). The lender benefits because they are the one who provides the funds for the loan. In the case of default, the lender has the right to instruct the trustee to sell the property in order to recover the funds owed. This arrangement provides a clear legal framework for securing the loan against the property, thereby ensuring that the lender's interests are protected.

The role of the other parties helps illustrate this further. The borrower is the individual taking out the loan and therefore has obligations under the deed of trust. The neutral third party, or trustee, acts as an intermediary to manage the process and ensure fairness and legality in the transaction, but does not benefit financially from the loan themselves. Thus, the lender being the beneficiary is essential to this arrangement.