{"id":14652,"date":"2024-08-21T21:19:53","date_gmt":"2024-08-21T21:19:53","guid":{"rendered":"https:\/\/testv78.demowebsitelinks.com\/Integrity-Capital\/?page_id=14652"},"modified":"2024-08-21T21:37:38","modified_gmt":"2024-08-21T21:37:38","slug":"what-is-a-deed-of-trust","status":"publish","type":"page","link":"https:\/\/testv78.demowebsitelinks.com\/Integrity-Capital\/what-is-a-deed-of-trust\/","title":{"rendered":"What Is a Deed of Trust?"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-page\" data-elementor-id=\"14652\" class=\"elementor elementor-14652\" data-elementor-post-type=\"page\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-9440028 md-bg-hidden elementor-section-stretched elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"9440028\" data-element_type=\"section\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;,&quot;stretch_section&quot;:&quot;section-stretched&quot;}\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-c1360cc\" data-id=\"c1360cc\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-4c03c4d elementor-invisible elementor-widget elementor-widget-text-editor\" data-id=\"4c03c4d\" data-element_type=\"widget\" data-settings=\"{&quot;_animation&quot;:&quot;fadeInUp&quot;}\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><strong>What Is a Deed of Trust?<\/strong><\/p><p><em>By\u00a0<\/em><a href=\"https:\/\/www.thebalancemoney.com\/elizabeth-weintraub-1797654\"><em>Elizabeth Weintraub<\/em><\/a><\/p><p><strong>Definition<\/strong><\/p><p>A\u00a0<strong>deed of trust<\/strong>\u00a0is a type of security for a loan. It names a third party, called the &#8220;trustee,&#8221; to hold the legal title until you pay it off.<\/p><p><strong>Key Takeaways<\/strong><\/p><ul><li>A deed of trust is a type of security for a loan that names a third party called the<\/li><li>&#8220;trustee&#8221; to hold the legal title until you pay it off.<\/li><li>The trustee is typically an entity such as a title company with &#8220;power of sale&#8221; in the event that you default on your loan payment.<\/li><li>In many states, you can have either a deed of trust or a mortgage, but not both.<\/li><li>Unlike a mortgage, in the event of a default, the trustee has the power to sell the property without a court proceeding. This is called &#8220;nonjudicial foreclosure.&#8221;<\/li><\/ul><p><strong>Definition and Example of a Deed of Trust<\/strong><\/p><p>A deed of trust is an agreement between you\u2014the homebuyer\u2014and your lender. It states that you&#8217;ll repay the loan and that a third party will hold legal title to the property until you do. This third party is known as the &#8220;trustee.&#8221;<\/p><p>A deed of trust is the security for your loan. It is recorded in the public records. If a state requires it, borrowers must agree to sign the deed of trust if they want to take out a home loan, just as they would have to do to sign a mortgage in another state.<sup>1<\/sup><\/p><p><strong>How Does a Deed of Trust Work?<\/strong><\/p><p>A deed of trust addresses three parties:<\/p><ul><li>The trustor, or obligor, who is the borrower<sup>1<\/sup><\/li><li>The trustee, who holds &#8220;bare or legal&#8221; title (usually a title company)<\/li><li>The beneficiary, who is the lender<sup>2<\/sup><\/li><\/ul><p>The trustee doesn&#8217;t represent either the borrower or the lender. The trustee is typically an entity such as a title company that holds &#8220;power of sale&#8221; in the event that you default on the loan.<sup>2<\/sup>\u00a0Once the deed is paid in full, the trustee reconveys the property to the buyer.<sup>1<\/sup><\/p><p>A deed of trust includes most of the same information as a mortgage, including:<\/p><ul><li>The <u>origina<\/u>l loan amount<\/li><li>A\u00a0<a href=\"https:\/\/www.thebalancemoney.com\/legal-description-1798580\">legal description of the property<\/a>\u00a0used as security for the mortgage<\/li><li>The names of parties: trustee, trustor, and beneficiary<\/li><li>The inception and maturity dates of the loan<\/li><li>The provisions and requirements of the mortgage<\/li><li>Late fees<\/li><li>Legal process in the event of default (a &#8220;power of sale&#8221; clause)<\/li><li>Acceleration and\u00a0<a href=\"https:\/\/www.thebalancemoney.com\/what-is-an-alienation-clause-1798510\">alienation clauses<\/a>, which detail when a homeowner is considered delinquent or when they can sell the home<\/li><li>Riders such as\u00a0<a href=\"https:\/\/www.thebalancemoney.com\/prepayment-penalty-the-basics-315632\">prepayment penalties<\/a>\u00a0or the terms of an adjustable-rate mortgage<sup>3<\/sup><\/li><\/ul><p>The trustee can file a\u00a0<a href=\"https:\/\/www.thebalancemoney.com\/what-is-a-notice-of-default-1798596\">notice of default<\/a>\u00a0in the event that the borrower doesn&#8217;t pay according to the promissory note&#8217;s terms. The trustee can also swap in another trustee to handle the\u00a0<a href=\"https:\/\/www.thebalancemoney.com\/what-is-a-foreclosure-1798185\">foreclosure<\/a>\u00a0itself, by filing a formal Substitution of Trustee in most cases.<\/p><p><strong>Deed of Trust vs. Mortgage<\/strong><\/p><p>When you take out a loan to purchase a home, you will sign a mortgage or a deed of trust. These terms may often be used interchangeably, but there are some\u00a0<a href=\"https:\/\/www.thebalancemoney.com\/how-mortgage-works-1797817\">important distinctions<\/a>.<\/p><table><thead><tr><td><p><strong>Mortgage<\/strong><\/p><\/td><td><p><strong>Deed of Trust<\/strong><\/p><\/td><td>\u00a0<\/td><\/tr><\/thead><tbody><tr><td><p>Used in all states.<\/p><\/td><td><p>Used in some states.<\/p><\/td><td>\u00a0<\/td><\/tr><tr><td><p>Bank forecloses in the courts.<\/p><\/td><td><p>Nonjudicial foreclosure.<\/p><\/td><td>\u00a0<\/td><\/tr><tr><td><p>Between borrower and lender.<\/p><\/td><td><p>Among borrower, lender, and trustee.<\/p><\/td><td>\u00a0<\/td><\/tr><tr><td><p>Lender and borrower both have interest in the property until loan is paid off.<\/p><\/td><td><p>Trustee has legal title to the property until loan is repaid.<\/p><\/td><td>\u00a0<\/td><\/tr><\/tbody><\/table><p><strong>\u00a0<\/strong><strong>Foreclosure<\/strong><\/p><p>The trustee has the power to sell the property in the event of default, without a court procedure. This is called &#8220;nonjudicial foreclosure.&#8221; It&#8217;s a key difference between a deed of trust and a mortgage. With a mortgage, a bank must go through the court to initiate a foreclosure.<\/p><p>The trustee cannot complete the foreclosure until a certain amount of time passes from the notice of default. Some states allow a redemption period. In this case, the borrower has time to buy the property back after a nonjudicial foreclosure. Other states give borrowers the right to mediation before the foreclosure process begins.<sup>4<\/sup><\/p><p><strong>State Laws<\/strong><\/p><p>Some states don&#8217;t recognize deeds of trust. Some states allow mortgages\u00a0<em>or<\/em>\u00a0deeds of trust. Others allow for both.<sup>1<\/sup>\u00a0Consult with a real estate attorney about the legal options and requirements where you live.<\/p><p><strong>Deed of Trust vs. Promissory Note<\/strong><\/p><p>The deed of trust documents the terms of the debt, secured by the property. The\u00a0<a href=\"https:\/\/www.thebalancemoney.com\/promissory-note-1798611\">promissory note<\/a>\u00a0is a separate document, although it often goes hand-in-hand with a deed of trust.<\/p><p>A promissory note is a promise to pay, signed by the borrower in favor of the lender. It contains the terms of the loan, such as the interest rate and payment obligations. Legally, both a mortgage and a deed of trust are types of promissory notes.<sup>5<\/sup><\/p><p>The promissory note is marked &#8220;paid in full&#8221; when the loan is paid off. It&#8217;s returned to the borrower along with a recorded\u00a0<a href=\"https:\/\/www.thebalancemoney.com\/what-is-a-deed-of-reconveyance-1798622\">reconveyance deed<\/a>. The lender retains the promissory note during the term of the loan. The borrower has only a copy until the loan is paid off.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>What Is a Deed of Trust? By\u00a0Elizabeth Weintraub Definition A\u00a0deed of trust\u00a0is a type of security for a loan. It names a third party, called the &#8220;trustee,&#8221; to hold the legal title until you pay it off. Key Takeaways A deed of trust is a type of security for a loan that names a third&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"class_list":["post-14652","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Is a Deed of Trust? - Integrity Capital<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/testv78.demowebsitelinks.com\/Integrity-Capital\/what-is-a-deed-of-trust\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Is a Deed of Trust? - Integrity Capital\" \/>\n<meta property=\"og:description\" content=\"What Is a Deed of Trust? 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