What role does the trustee play in a deed of trust?

The correct choice clearly identifies the fundamental role of the trustee in a deed of trust. A deed of trust is a security instrument that involves three parties: the borrower (or trustor), the lender (or beneficiary), and the trustee. In this arrangement, the trustee holds the title to the property in a fiduciary capacity for the benefit of the lender until the loan is fully paid off by the borrower.

This holding of title is crucial because it secures the lender’s interest in the property; if the borrower defaults on the loan, the trustee has the authority to initiate foreclosure proceedings in order to sell the property and repay the lender. Thus, the trustee's role is essential in ensuring that the interests of the lender are protected while also providing a clear legal structure for the borrower to have access to the equity in the property until the loan is satisfied.

Understanding this specific function of the trustee helps clarify why they do not represent the buyer in negotiations, act as a mediator, or distribute funds upon the sale, as these roles pertain to different processes or parties involved in real estate transactions.