A lender who loans you money to buy a home

A lender, usually a bank, is called a beneficiary in certain states. The beneficiary holds onto the deed of trust, which acts as a guarantee that you will repay your loan. If you fail to pay your loan (default), the beneficiary can give the trustee – the neutral third party who acts on behalf of the beneficiary – permission to foreclose on your property.

See: Deed of trust