In a deed of trust transaction, when a trustee sells the property and the proceeds generate a deficiency, the _____.
A) borrower is relieved of all obligations to the lender
B) lender may sue the borrower on the debt and recover a judgment
C) lender may sue the trustee
D) trustee may sue the borrower

Question

Quizplus · Accepted Answer

In a deed of trust transaction, the borrower deeds to the trustee the property that is to be put up as security. The trust agreement usually gives the trustee the right to foreclose or sell the property if the borrower fails to make a required payment on the debt. If there is a deficiency after the sale, the lender has to sue the borrower on the debt and recover judgment.

In a Deed of Trust Transaction, When a Trustee Sells