A Deed of Trust

A deed of trust is slightly different from a mortgage. Our discussion is from a laymen’s perspective as we are not lawyers.

A mortgage generally has two parties: the borrower and the lender. The borrower puts up in their interest in a piece of property to secure the repayment of the debt that the borrower has borrowed from the lender.

A deed of trust has three parties: the borrower, the lender, and a trustee. The borrower assigns their interest in the property to the trustee during the repayment term. The trustee can sell the property if the borrower defaults on the loan. The trustee’s interest in the property exists while the loan is being repaid. After repayment, the borrower again has title to the property.