How to Transfer a Deed of Trust

A home secured by a deed of trust.

It is a common practice for one lender to sell a loan to another lender. In fact, banks and other mortgage lenders sell and exchange mortgage loans routinely. This is accomplished by transferring the note and the deed of trust from the old lender to the new lender. The new lender then fills the shoes of the old lender. Notes are easy to transfer, but because a deed of trust relates to real estate, there are special rules to consider when transferring the deed of trust.

Things You'll Need

• Assignment of Deed of Trust
• Deed of Trust
• Public Notary

Instructions

Transfer a Deed of Trust

1. Prepare an Assignment of Deed of Trust. This is a routine legal document that identifies the original trust deed and states that the first lender transfers all his rights in the deed of trust to the new lender.

2. Have the first lender, or an authorized representative of the first lender, sign the Assignment of Deed of Trust.

3. Have a public notary acknowledge the first lender's signature on the Assignment of Deed of Trust.

4. Take the Assignment of Deed of Trust to the county recorder's office in the same county where the secured property is located. The county recorder will charge a fee, probably around $20, to record the Assignment of Deed of Trust in the public land records.

5. Send a letter notifying the borrower, referred to as the "trustor" or "grantor" in the deed of trust, that you are now the lender under the deed of trust loan.

Tips & Warnings

• --An Assignment of Deed of Trust is a simple document that needs to identify the trust deed, including all of the parties to the trust deed and the recording information for the trust deed. All of this is public record and should be written or stamped on the first page of the trust deed.

• --For technical legal reasons, the lender is referred to as the "beneficiary" in a trust. This means that, as a technical matter, the first lender is assigning its rights as beneficiary under the trust deed. In practical effect, this is the same as simply transferring the trust deed.

• If the trust deed has not been recorded yet, you will need to have that done before you can legally transfer the trust deed to a new lender (beneficiary).

References

• "Land Transactions and Finance;" Grant S. Nelson and Dale A. Whitman; 2004.