Who is the beneficiary in the deed of trust security instrument used in a title theory state?

In a deed of trust, the beneficiary is the lender, who is the party that receives the security for the loan. In a title theory state, the borrower (the trustor) conveys legal title of the property to a third party (the trustee) who holds the title on behalf of the lender (the beneficiary) until the borrower pays off the loan.

The title company typically does not serve as the beneficiary in the context of a deed of trust; rather, it may handle the closing process and ensure proper title transfer. Thus, the correct beneficiary in a deed of trust is the lender, as they are the ones who have a financial interest in the property serving as collateral for the loan.

Investors may have a role in funding loans or purchasing them, but they are not the beneficiaries in the context of a deed of trust used between a borrower and a lender. Similarly, the borrower is the one who is obligated to repay the loan, not the beneficiary. Therefore, in a title theory state, it is the lender who holds the position of beneficiary in the deed of trust.