What role does a trustee play in a deed of trust?

In a deed of trust, the trustee plays a crucial role by acting on behalf of the lender. The structure of a deed of trust involves three parties: the borrower (who receives the loan), the lender (who provides the loan), and the trustee (who holds the legal title to the property until the loan is repaid).

When the borrower takes out a loan, they convey the property to the trustee, who holds it as security for the lender. This arrangement allows the trustee to execute the terms of the deed of trust, including initiating foreclosure proceedings if the borrower defaults on the loan. By acting on behalf of the lender, the trustee ensures that the lender's interests are protected throughout the loan period.

Understanding this role clarifies the mechanisms of a deed of trust. The other options, while related to the real estate transaction, do not adequately describe the function of the trustee in this specific context. The trustee does not merely hold title for the benefit of the borrower or serve as an appraiser, nor do they facilitate the transaction in the same active manner as they uphold the lender’s security interest.