Who holds the trust deed and note on a conventional loan?

In a conventional loan, the lending institution is responsible for holding both the trust deed and the note. The note is a legally binding document that outlines the borrower's promise to repay the loan, including the terms of the repayment, such as the interest rate and schedule. The trust deed serves as a security instrument that gives the lending institution the right to take possession of the property if the borrower defaults on the loan.

This arrangement is vital for the lender, as it secures their interest in the property until the loan is fully paid off. The trust deed acts as collateral, providing assurance to the lender that they can recover their investment through foreclosure proceedings if necessary. This system establishes a clear relationship between the borrower and the lending institution, providing legal recourse to both parties in the event of default.

The other roles, such as the borrower, escrow company, and real estate agent, do not hold the trust deed and note. The borrower is the one taking out the loan, while the escrow company facilitates the transaction and ensures that all terms are met before the deal is completed. The real estate agent helps in the buying or selling of property but does not hold any financial documents related to the loan itself.