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A trust deed ?also known as a deed of trust?is a document sometimes used in real estate transactions in the U.S. It is a document that comes into play when one party has taken out a loan from another party to purchase a property.
1. Unless specifically disqualified by the terms of the trust instrument, any person, regardless of state of residence and including family members, friends, and corporate fiduciaries, is eligible to serve as a trustee.
Instead of an agreement directly between a lender and a borrower, a trust deed places the title of a property in the hands of a third party, or trustee. Only after the borrower has satisfied the terms of their debt to the lender will the property be fully transferred to the borrower.
To transfer real property into your Trust, a new deed reflecting the name of the Trust must be executed, notarized and recorded with the County Recorder in the County where the property is located. Care must be taken that the exact legal description in the existing deed appears on the new deed.
Howa trustee deed works A trust deed is used in place of a mortgage. A person (the lendee) buys a home and finances it through a bank (the lender). A third party?the trustee, usually an escrow company?legally holds title to the home for the lender as security against the loan.