Trust Deed/Deed of Trust vs a Mortgage?

Question

When/why would you use a Trust Deed/Deed of Trust instead of a Mortgage and vice versa?

Is there any advantage to Trust Deeds?

Is the Trust Deed transaction handled differently than a mortgage?

Is a Trust Deed transaction a real estate agent should be able to handle?

Martin Scherer · Answer

Mortgages are two party Mortgagor and Mortgagee

Trust Deeds have three parties Trustor, trustee and beneficiary.

Mortgages generally allow deficiency judgements, and ability to redeem for a period of time. Slow process if you purchase a foreclosed home and can have the original owner come back and demand their home back by paying whats owed-- not necessarily what it's worth.

Trust Deeds come in more flavors. In CA for instance a purchase money transaction doesn't allow a deficiency judgement; in Idaho it does. Borrowing on a second after a purchase could have the effect of allowing for a deficiency judgement against you should you default.

You need to research the instruments you will be using in the states you are buying as conditions vary by state.

Chris Stromdahl · Answer

@Martin Scherer , thank you for the explanation.

Trust Deed/Deed of Trust vs a Mortgage?

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