Trustee

In depth

In a deed of trust transaction, the trustee holds legal title for the benefit of the lender (beneficiary) and reconveys to the borrower (trustor) when the loan is paid. On default, the trustee conducts a non-judicial foreclosure under the power of sale clause. Misconception: a trustee is not the lender or the borrower; they are independent and sometimes professional fiduciaries. Practically, common trustees include title companies, attorneys, and licensed trustee services. Trustees must be qualified under state law (often a state-licensed person or entity). The borrower or lender can substitute a new trustee through a recorded substitution. Trustees have minimal duties absent default but must follow strict procedural rules during foreclosure.