What is the secured interest in real property held by a trustee to protect the lender until the loan is repaid?

• A. Mortgage
• B. Trust deed; Deed of trust; trust indenture
• C. Lien
• D. Title

Answer: (B)

Holding a secured interest with a trustee is described by a deed of trust (also called a trust deed or trust indenture). In this setup, the borrower transfers the legal title to a trustee to hold on behalf of the lender as security for the loan. The borrower retains the beneficial interest and use of the property, but the trustee’s job is to hold the title and, if the borrower defaults, facilitate foreclosure for the lender. This tri-party arrangement allows for potentially quicker (nonjudicial) foreclosure in many jurisdictions.

This differs from a mortgage, where the lender holds a lien on the property without a third-party trustee holding title, meaning foreclosure typically proceeds through the court system. A lien in general is the encumbrance securing the debt, not the mechanism itself, and title refers to ownership, not the security instrument.