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Managing Multiple Beneficiaries on Trust Deeds

Nearly all real estate loans in California are secured by a trust deed. A trust deed is a device wherein a borrower transfers legal title to property to a trustee which holds it as security for a debt between a borrower and a lender. Most real estate loans have only one lender (at any given time) such as a bank, however, some real estate financing arrangements have multiple lenders (or beneficiaries) for a single trust deed. Often, these beneficiaries will be several private individuals who come together and lend on a single loan. When things are going well and everyone is getting paid, ownership and management of the trust deed is a simple from the beneficiaries’ end…they sit back and get paid in accordance with the terms of the loan. However, if the loan is in default, the different beneficiaries may not agree on how best to move forward.

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