REAL ESTATE / ESTATE PLANNING - DEED OF TRUST - A Deed of Trust, also known as a Trust Deed, is a legal agreement used in real estate transactions, serving as an alternative to a mortgage, where a third-party trustee holds the property's legal title until the loan is paid off.
Non-Judicial Foreclosure:
Deeds of Trust often include a "Power-of-Sale" clause, allowing the trustee to conduct a Non-Judicial Foreclosure (selling the property without a court order) if the borrower defaults on the loan.
Equitable Title Remains with Borrower:
While the trustee holds the legal title, the borrower retains the equitable title (the right to use and enjoy the property).
Promissory Note:
A Deed of Trust is always used in conjunction with a Promissory Note, which outlines the loan terms and the borrower's promise to repay the borrowed money.
Common in Some States:
Deeds of Trust are used in place of Mortgages in some states, such as California, while mortgages are used in others.
Three-Party Agreement:
Unlike a Mortgage, which involves a borrower and a lender, a Deed of Trust involves three parties: the borrower (trustor), the lender (beneficiary), and a neutral third party, the trustee (often a title company or bank).
Security for a Loan:
The borrower transfers legal title to the trustee, who holds the property as security for the loan from the lender to the borrower.
Does not include any State or Federal Court Fees or any Third-Party Costs such as County Recorder or E-Filing Fees.
REAL ESTATE / ESTATE PLANNING - DEED OF TRUST (Nationwide)
REAL ESTATE / ESTATE PLANNING - DEED OF TRUST - A Deed of Trust, also known as a Trust Deed, is a legal agreement used in real estate transactions, serving as an alternative to a mortgage, where a third-party trustee holds the property's legal title until the loan is paid off.
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Non-Judicial Foreclosure:
Deeds of Trust often include a "Power-of-Sale" clause, allowing the trustee to conduct a Non-Judicial Foreclosure (selling the property without a court order) if the borrower defaults on the loan.
-
Equitable Title Remains with Borrower:
While the trustee holds the legal title, the borrower retains the equitable title (the right to use and enjoy the property).
-
Promissory Note:
A Deed of Trust is always used in conjunction with a Promissory Note, which outlines the loan terms and the borrower's promise to repay the borrowed money.
-
Common in Some States:
Deeds of Trust are used in place of Mortgages in some states, such as California, while mortgages are used in others.
-
Three-Party Agreement:
Unlike a Mortgage, which involves a borrower and a lender, a Deed of Trust involves three parties: the borrower (trustor), the lender (beneficiary), and a neutral third party, the trustee (often a title company or bank).
-
Security for a Loan:
The borrower transfers legal title to the trustee, who holds the property as security for the loan from the lender to the borrower.
Does not include any State or Federal Court Fees or any Third-Party Costs such as County Recorder or E-Filing Fees.
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