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1.3.3.8 Foreclosing Trustee

In states that use a deed of trust as the underlying security instrument for a home loan, the borrower technically conveys title to the property to a trustee who holds the property for the benefit of the originator. The trustee is typically a title company, escrow company, or other local company specializing in foreclosure services. When the borrower defaults, the servicer will generally instruct the trustee to sell the property under the power of sale provision in the deed of trust. Many times a notice of substitution trustee is filed shortly before foreclosure proceedings are initiated. This substitution merely changes the entity that will pursue the foreclosure on behalf of the servicer/loan owner.

The trustee named on the deed of trust (or later substituted) should not be confused with the owner of the loan, which is commonly a trustee for a trust holding securitized mortgage loans (e.g., Deutsche Bank National Trust Company as Trustee for the MLMI Trust Series 2005-SL1).