in the deed of trust there is a third party called trustee, if this trust deed is between two individuals, a personal loan against the borrowers home equity, how is the trustee be chosen and is the trustee being paid as neutral party? how do we find one to be trustee and how much is normally the fee involved?
A deed of trust is a three-party instrument securing a loan or other obligation, which a lender (beneficiary) records against real property as security for payment of the obligation due to it based on a promissory note signed by the borrower (trustor).
The trustee must be a neutral third party without a pre-existing personal or financial relationship with either the borrower or the lender. Often times, a title insurance company is initially designated as the trustee. The trustee can also be a law firm, a bank or an individual.
The trustee can be changed anytime by a Substitution of Trustee.
Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult with your own attorney.
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