PSI Virginia Real Estate Practice Exam

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Prepare for the Virginia Real Estate Exam with our interactive quiz. Study using multiple choice and flashcards, complete with hints and detailed explanations. Ace your test with confidence!

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What does a Deed of Trust primarily secure?

The title is transferred to the beneficiary directly
The title is transferred from the trustor to the trustee
The title remains with the grantor throughout the loan
The property is fully owned by the beneficiary

The correct answer is: The title is transferred from the trustor to the trustee

A Deed of Trust primarily secures the loan used to purchase real estate by transferring the title from the trustor (the borrower) to the trustee (a neutral third party) as collateral for the loan. In this arrangement, the trustee holds the title on behalf of the beneficiary (the lender or financial institution) until the loan is paid off. This process ensures that if the borrower defaults on the loan, the trustee has the authority to initiate a foreclosure process on behalf of the beneficiary without the need for court action, making it a more streamlined process compared to a mortgage. The other options do not accurately reflect how a Deed of Trust functions: while the title does transfer to the trustee, it does not become the property of the beneficiary directly, nor does it imply that the property is owned outright by the beneficiary until the loan is fully repaid. Furthermore, the title does not remain with the grantor—the trustor has temporarily relinquished it to secure the loan. This mechanism is crucial in real estate financing, providing security for the lender while allowing the borrower to use the property.