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Download Deed of Trust Forms. State specific, with sample previews and free law summaries for all states.
If you've been wondering what are trust deeds, this article will answer popular questions such as what is a deed of trust, what is a trust deed assignment, and how a trust deed is released. The article also discusses various other concepts related to deeds of trust.
A trust deed or a deed of trust is an instrument in writing that lays down the terms and conditions of a trust agreement. A trust deed is a contract entered into between a lender and a borrower to secure payment of the borrower's debt by transferring an interest in the borrower's land to a third party known as a trustee. Deeds of trust authorize the trustee to sell trust property if the borrower fails to pay the debt.
Parties to a deed of trust are:
There are different types of trust property deeds:
A deed of trust is similar to a mortgage. However, in a mortgage there is an actual transfer of title to the lender, whereas title is not transferred in trust deed. Mortgages are generally related with loans secured on real estate.
Many jurisdictions allow second and third trust of deeds or mortgages. A second mortgage or trust deed is a mortgage that is second in priority to another mortgage. The lender of a second mortgage loan holds a junior security interest in the real property.
When a loan is paid in full, a lender can request the trustee to return property by reconveyance. This can be done with the help of a deed of reconveyance. A reconveyance deed is an instrument issued by a lender to a borrower where the lender officially certifies that s/he is releasing claim on the property. A reconveyance deed is also known as release of mortgage document or release of deed of trust document. When a loan is fully paid, a satisfaction of mortgage is recorded with the register of deeds in the county records.
If a loan is in default, a lender can file a notice of default. After issuing notice of default to the borrower, a trustee can commence foreclosure by power of sale. In a foreclosure sale by trustee or trustee's sale, the trustee auctions the property to the highest bidder. A transfer or sale of real estate is made by preparing and recording a trust transfer deed. After the sale, a borrower can buy back the property within a stipulated period by paying the auction price plus interest and other charges. This right is known as a right of redemption.
Lenders of mortgages or trust deeds can assign mortgages to other lenders. When an assignment of mortgage is made, the assignee gets all rights of the original lender. In order to provide a valid notice of assignment, the assignment must be in writing and recorded in the records of the county where the property is situated.
Trust deeds or deeds of trust are legal documents that stipulate the terms and conditions of a trust. A trust is an entity created for the benefit of a person, usually a lender, in which a borrower gives legal title over real property to a trustee, who holds the property as a secured loan for the benefit of the lender. A trust property deed authorizes a trustee to hold the trust property as security for a debt between a borrower and lender. Various sample trust property deeds, deeds trust, and other deed of trust forms are available on the US Legal Forms website.
Trust deeds vary in their nature and the purpose for which they are created. Different types of trust deeds are:
Apart from these, there are second and third trust of deeds or mortgages. A second mortgage will be paid only after fulfilling the first mortgage. However, the lender of a second mortgage holds a security interest in the real property.
The parties to a deed for trust are:
A trust deed release or release of mortgage is an acknowledgement by a lender that all conditions of the trust deed have been fully satisfied. After full satisfaction of the loan, a lender makes a written request to the trustee to remove lien on the property created by the trust deed. A formal document by which the lender makes a trust deed release is called a reconveyance deed. A deed of reconveyance shows full satisfaction of mortgage. When the terms of a Deed of Trust or mortgage loan are satisfied, a request of Release of Deed of Trust and the reconveyance deed must be recorded in the county records to remove the lien from the trust property.
A deed of trust assignment is a document by which transfer of title or rights in a trust property or mortgage is made to another person. The person who makes the deed transfer is called an assignor and the person to whom the mortgage is assigned is known as an assignee. By an assignment of mortgage, the assignee gets all rights of the original lender. A deed of trust assignment is also known as trust transfer deed.
A trustee's sale is a sale of a property held in trust due to default in payment of a loan. A trust deed gives a trustee the power of sale when a borrower defaults on a loan payment. Before the sale procedure, proper notice of default must be made to the defaulted borrower. A borrower has the right of redemption or right of repurchase even after the trustee's sale is made. However, the redemption has to be made within a stipulated period.