Trust Deed Buyers

Deed Of Trust vs. Mortgage



Filed under: Deed Of Trust,Deed Of Trust Forms,Trust Deed Buyers,Trust Deed Investments by Frank Mori |

What is the difference between a mortgage and a deed of trust?

The fundamental difference between deed of trusts and mortgages is the utilized procedure that is followed if the borrower neglectes his or her obligation to pay off the loan and breaks the agreement. Concerning mortgages, if a borrower “defaults”, such as by failing to make monthly payments or meet other conditions of the loan, such as carrying homeowner’s insurance and maintaining the house in good repair, the lender have to bring a court action in order to foreclose on the property. Nevertheless with a trust deed, if the homeowner does not pay the loan, the foreclosure process is usually much faster and less complicated than the formal court foreclosure process.

As a technical matter, a mortgage involves a relationship between

  • the lender and
  • the borrower/homeowner

Nevertheless a deed of trust involves three parties:

  • the homeowner,
  • the lender,
  • title insurance company which is holding legal title to the real estate until the loan is fully repaid.

When the loan is fully paid, the title company transfers property title over to the homeowner. If the homeowner neglectes his or her obligation, then the lender simply complies with the rather straight forward provisions of the law of the state where the property is located, gives the appropriate notices, and then turns the property back to the lender.

If you are ever worried about a near foreclosure, you would be well served by consulting with an attorney in the state where the property is located.

Related posts:

  1. Deed Of Trust Vs. Mortgage
  2. Deed Trusts | Loan Enforcement & Foreclosures
  3. Free Forms for a Deed of Trust
  4. Trust Deed | Borrowers
  5. What Secures A Trust Deed Investment ?
Comments (0)

No Comments »

RSS feed for comments on this post. | TrackBack URI
You can also bookmark this on del.icio.us or check the cosmos

Leave a comment

You must be logged in to post a comment.

« Deed Of Trust Definition    AITD (ALL INCLUSIVE TRUST DEED) »

What is a deed of Trust ?

A deed of trust, also known as a trust deed, is a unique form of loan recorded within public records as a deed that has a lien on the property. Trust deeds are used by borrowers instead of conventional mortgages. This is usually done in order to obtain greater flexibility on the loan that would be available under the rules and regulations in standard lending institutions such as banks.

With a deed of trust, there are three main parties involved. These parties include the trustor - which is the person who is borrowing the money - the beneficiary - also known as the lender - as well as a neutral third party. This third party is the trustee, who temporarily holds part of the property title until the loan is paid in full.