Deed of Trust

Secure a real estate loan with a legal document granting the lender an interest in the property.

What Is a Deed of Trust?

A Deed of Trust is a real estate document used in some states instead of a Mortgage. It involves three parties: the Trustor (borrower), the Beneficiary (lender), and the Trustee (a neutral third party). The borrower gives the Trustee legal title to the property to hold securely until the loan (Promissory Note) is paid off in full.

Deed of Trust vs. Mortgage

While both serve the same purpose—securing a loan with property—the primary difference is the foreclosure process.

Mortgage: Requires a lengthy judicial foreclosure (going through the court system). Used in states like Florida and New York.
Deed of Trust: Allows for a fast, relatively inexpensive non-judicial foreclosure because the Trustee holds the "Power of Sale" clause. Used in states like California, Texas, and Colorado.

Required Elements

To be legally valid and recorded, a Deed of Trust generally must include:

The loan amount (Principal) and reference to the accompanying Promissory Note

The legal description of the property (Block, Lot, Subdivision—found on the existing deed)

Names and addresses of the Trustor, Beneficiary, and Trustee

Acceleration Clause (Requiring full payment if the borrower defaults)

Power of Sale Clause (Authorizing the trustee to sell the property upon default)

Due-on-Sale Clause (Requiring full payment if the property is sold)

Notarized signatures of the borrowers executing the document

Important: After the Deed of Trust is signed and notarized, it must be recorded at the local county clerk or recorder's office where the real estate is located to publicly establish the lender's lien position.

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Correctly structure your real estate collateral and protect your investment.

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