Also known as: deeds of trust · trust deed
Written by attorneys · grounded in primary & secondary sources — see below
A security instrument by which a borrower conveys title to real property to a trustee to hold for the benefit of a lender until the debt is paid. The borrower retains possession and the right to redeem. Upon default the lender may direct the trustee to foreclose and satisfy the obligation.
Dorothy Daniels borrowed funds from Dover Bank to purchase a warehouse. She executed a deed of trust conveying title to a title company as trustee. The trustee held legal title for the bank while Dorothy retained possession and the right to redeem upon full repayment.
David Dawson defaulted on payments secured by a deed of trust on his retail building. The lender directed the trustee to conduct a power-of-sale foreclosure. The sale terminated Dawson's equity of redemption and transferred the property free of his interest.
Delilah Duran granted a deed of trust containing a dragnet clause to secure an initial construction loan from Dawson Steel. After the tax lien attached, the lender made a second acquisition loan. The clause brought the later advance within the security interest.
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Damian Decker created a deed of trust transferring his commercial lot to himself as trustee with full revocation rights. Upon his death his surviving spouse claimed the property should be treated as part of the probate estate for her elective share.
Devon Drake executed a deed of trust in one state naming a trustee in another state to hold title to land located in a third state. After the settlor's death, claimants disputed whether the forum court could exercise jurisdiction over the trustee to determine the deed's validity.
Dwight Dorsey and his co-owner held property as joint tenants subject to an existing deed of trust. One owner executed a quitclaim deed conveying her interest to herself as tenant in common and assigned her interest in the deed of trust to break the joint tenancy.
A deed of trust conveys title to a third-party trustee who holds it for the lender until the debt is paid, whereas a mortgage typically creates a lien directly in favor of the lender. Both create a security interest and permit foreclosure upon default.
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A deed of trust often contains a power-of-sale clause allowing nonjudicial foreclosure conducted by the trustee. Judicial foreclosure through court action remains available in every jurisdiction, and the choice affects notice and redemption rights.
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Yes. A dragnet clause extends the security interest to future advances made by the same lender. Priority of those advances depends on state statute, the mortgage terms, and whether the lender had notice of intervening liens.
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…when the defendant cannot be found, in suits for partition, divorce, by attachment, for the foreclosure of mortgages and deeds of trust, and for the enforcement of mechanics' liens and all other liens against real or personal property, and in all actions at law or in equity having for their immediate object the enforcement…