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Deed of Trust

What is A Deed of Trust?

Understanding what a Deed of Trust is and what is involved in securing one is critical when you want to obtain a piece of property in certain states, such as California. Essentially the document is a record that details the property in question, as well as the loan details being used to finance the property. As such, it contains records of the lender and the borrower, and is typically held by a third party for security purposes.

A Deed of Trust is utilized in some states within the United States in lieu of a mortgage. Whereas a mortgage is typically between the borrower and the lender, the Deed of Trust system involves a third party, referred to as a trustee. The trustee holds onto the Deed of Trust until the loan is paid in full. At that point in time, the Deed of Trust is transferred to the owner of the property in an altered form, which is known as a Deed of Release. This indicates the buyer has paid for the property in full and satisfied the conditions of the loan. The Deed of Trust paperwork will usually indicate this as well with a stamp or note saying, “Paid in Full.”

For assistance with completing Deed of Trust paperwork and/or a Deed of Trust filing, contact the team at We the People. We have been helping individuals progress through the often lengthy and difficult to comprehend legalistic nuances of a Deed of Trust for over 25 years. In order to fully comprehend the document and complete it correctly to save time, money and stress, seek the best advice available. We the People offers low cost, accurate, legal document preparation, along with our expert advice.

Visit our store directory to find a location near you and get the help you need to complete Deed of Trust paperwork. Make an appointment today.

The Deed of Trust Paperwork: A Closer Look

A Deed of Trust contains a wide range of information related to the property and the loan that has been issued. These details include:

• Description of the property
• Legal details of the borrower and the lender
• The amount of the loan
• The beginning date of the loan and the maturity date
• The interest rate on the loan
• Details of late fees or penalties that may be issued
• Additional legal provisions as determined during the process

Understanding the Deed of Trust paperwork is important, because if you should miss a payment, you may be subject to penalties, late fees, and other legal ramifications. That’s why you need someone with experience and knowledge to explain fully what the provisions of that Deed of Trust paperwork are.

If you are going to be filing a Deed of Trust or need help completing Deed of Trust paperwork, contact We the People today. Visit our store directory to find an office near you. Make an appointment today.

Frequently Asked Questions About a Deed of Trust

Who Is the Trustee in a Deed of Trust?

Unlike a mortgage that requires only two parties, a Deed of Trust requires three parties. A Deed of Trust conveys the interest of a property to a third party, who is designated as the trustee. This person holds the title as security for the loan and must hold that title for the duration of the loan term on behalf of the borrower and lender. There are not typically restrictions as to who can be the trustee; however, this person must not be personally affiliated with the lender or borrower. This is because the trustee must remain a neutral party and never show bias to either party. Many people choose to have a title company serve as trustee, but an individual, group, or business can serve this role as well.

Where to Get a Deed of Trust?

To get a Deed of Trust, you must file the proper paperwork with the proper court as generally outlined above. These documents must be filed with the county clerk or recorder, and the lender typically sends them to the recording office after the property closing. In most circumstances, the lender will provide the borrower with a copy of the Deed of Trust, while the originals are mailed to the grantee after recording. Many county clerk and recorder offices will provide copies of this document for a small search and print fee. Alternatively, mortgage lenders may have copies of Deeds of Trust if you need them.

How Does a Deed of Trust Work?

A Deed of Trust works by establishing a formal and legal written agreement to place a property in the hands of an impartial third party, who holds the property until the borrower’s debt is paid. The borrower retains the property title during this time and has responsibility for the property unless otherwise specified in the legal documents. Deeds of Trusts differ from mortgages because they involve a neutral third party during a period of satisfying debt. In most states, foreclosure sale under a Deed of Trust requires a less strict legal process if the borrower defaults. The trustee is responsible for distributing funds between the lender and borrower upon completion of the sale.

What’s the Difference between a Deed of Trust and a Title?

A Deed of Trust and a title are both important real estate documents, but the title establishes ownership rights and convey the transferring of property ownership from one party to another. Deed of Trusts do not prove ownership, but instead are used to secure home loans as a mortgage alternative. A Deed of Trust should not be confused with a basic Deed, which is a separate document that can transfer the title from one person to another. The process of setting up a Deed of Trust varies from one state to another, which is why it’s a good idea to work with a trusted legal document preparer, like We the People, that knows the law where you live.

What’s the Difference between a Deed of Trust and a Mortgage?

Deeds of Trust are often used when people use alternative lenders that are not banks to buy property. Deeds of Trust function in a similar way to a mortgage but have distinct differences. For example, a mortgage only involves the borrower and lender, while a Deed of Trust involves a third-party trustee, who holds the property title until the loan is repaid. If a borrower defaults on payments with a mortgage, the lender files a lawsuit, the property goes through a judicial foreclosure process, and the property sale goes through the court system. But with a Deed of Trust, this court process is often bypassed in favor of non-judicial foreclosure, which can be a quicker and more affordable way to handle the issue.
