In a deed of trust, who is identified as the beneficiary?

In a deed of trust, the beneficiary is the lender. This is because the deed of trust is a type of security instrument used to secure a loan. In this arrangement, the borrower (or trustor) conveys the legal title of the property to a third party (the trustee) as an assurance for the repayment of the loan to the lender. If the borrower defaults on the loan, the lender, as the beneficiary, has the right to instruct the trustee to take possession of the property and sell it to recover the owed amount.

The role of the beneficiary highlights the lender’s interests and rights within the deed of trust arrangement, as they are the party extending the loan and expecting repayment with interest. Understanding the functions of each party in a deed of trust is crucial in real estate finance, as it defines the legal relationships and responsibilities associated with property financing.