What Is a Deed of Trust?

A Deed of Trust is an agreement between the borrower and lender that a neutral third party will hold the title of a property until the borrower has paid the lender in full.

Role of Borrower

The role of the borrower or trustor is to make agreed-upon, timely payments on monies borrowed to purchase the property.

Role of Lender

The role of the lender or beneficiary is to lend the trustor an agreed-upon amount of money to purchase the property.

Role of Trustee

The role of the trustee is to hold the deed of trust until the loan has been paid in full. When the mortgage is paid in full, the trustee must issue a reconveyance deed to the borrower. Additionally, it's the responsibility of the trustee to act upon delinquent payments.

Delinquencies

A Notice of Default must be filed in public records for 3 months when the borrower becomes delinquent. The borrower may bring the loan current and pay any trust fees during this period.

Sale of Property

If the loan is not brought current during the Notice of Default, the trustee may publish a notice of intent to sale the property for three weeks. The trustee may legally sale the property without going to court (on the court steps), and give the proceeds to the lender. If the trustee recovers more than the balance of the loan, the trustee refunds this amount to the borrower.

References

• Deed of Trust
• Notice of Default