Deeds of Trust

In the United States and associated territories, two different types of mortgage instruments are available:- the mortgage (sometimes known as the mortgage deed), and the deed of trust.

Deed of trust

A deed of trust is a deed by the borrower to a trustee in order to secure a debt - it’s an obligation on your, the borrower’s, apart. In most US states, regardless of its contractual terms, it only creates a lien upon the title and not an actual transfer of title.

It differs from a mortgage in that, in many states, it can be foreclosed by a non-judicial sale held by the trustee. It is also possible to foreclose them through a judicial proceeding

Most legal instruments referred to as “mortgages” in California are in fact deeds of trust. Probably the one effective difference is that the process of foreclosure can be somewhat faster in the case of a deed of trust than for a mortgage, something of the order of 3 months, as opposed to a year.

Because the foreclosure on a loan secured by deed of trust does not require any action by the court, the transaction costs can be significantly less.