Xavier deeds to Peter,a trustee,his property in the form of security for the loan,which is lent by Smith,the beneficiary of the trust.The nature of this transaction renders it as a deed of trust.Under these circumstances,if Xavier defaults to pay the loan,which of the following is the appropriate way in which Smith can recover his loan?
A)By asking Xavier to enter into an action and sale contract
B)By exercising the right of exoneration
C)By exercising right of reimbursement
D)By notifying Peter to sell the property

Question

Quizplus · Accepted Answer

If the debtor fails to make a required payment on the debt,the trustee does not sell the property until the lender notifies him that the borrower is in default and demands that the property be sold.The trustee must notify the debtor that he is in default and that the land will be sold.

Xavier Deeds to Peter,a Trustee,his Property in the Form of Security