Who is considered the "beneficiary" in a deed of trust?

In a deed of trust, the beneficiary is the lender or creditor who benefits from the loan. This arrangement is used in real estate financing where the borrower (the property owner) gives a secured interest in the property to a trustee, who holds the title on behalf of the lender.

The lender is identified as the beneficiary because they are the party that receives the payment and has a financial interest in ensuring the loan is repaid. If the borrower defaults on the loan, the beneficiary can instruct the trustee to initiate foreclosure proceedings and recover the owed amount from the sale of the property. This structure provides a level of security for the lender while allowing the borrower to access funds to purchase the property.

In contrast, while the property owner and borrower may seem intertwined, they do not directly benefit from the loan's repayment in the same sense as the beneficiary. The real estate agent, meanwhile, plays a separate role in facilitating the transaction and is not involved in the financial arrangements outlined in the deed of trust.