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Other Names: Trust Deed Mortgage Agreement (in some states)
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What is a Deed of Trust?

A Deed of Trust is not a typical deed. It does not transfer the ownership of real property in the usual sense. Instead, a Deed of Trust creates a lien on real property as security or collateral for a loan. If the loan is not repaid on time, the lender can foreclose on and sell the property in order to pay off the loan.

A Deed of Trust is typically used in combination with a Promissory Note or Mortgage Agreement which sets out the amount and terms of the loan agreement. The borrower signs the loan agreement, which is a written promise to pay back the loan.
Deeds of Trust are part of the paperwork involved in buying property in many states. They include important sections including the power of sale, payment terms, tax and insurance requirements, and promissory note. You can also designate a trustee, often an attorney or title company, to hold the land title until the loan is paid off.
  • Not all states recognize a Trust Deed. Use a Mortgage Deed if you live in: Connecticut, Delaware, Florida, Indiana, Iowa, Kansas, Louisiana, New Jersey, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, Vermont, or Wisconsin.
  • A Deed of Trust is not used to transfer property to a living trust (use a Quitclaim Deed for that).
  • Other than sounding the same, Deeds of Trust and Living Trusts have virtually nothing in common.

When to use a Deed of Trust:

  • You're loaning money to another person or business and want to hold an interest in certain property they own as security until they repay their debt.
  • You're borrowing money and want to offer your property as security to the lender.
  • You are selling a property in a Deed of Trust state.
  • You are wanting to buy property in a Deed of Trust state.

Sample Deed of Trust

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After Recording Return To: |










THIS (the "Trust") dated , is made by and between:



of , ,




of , ,







of , ,

(collectively (




THAT FOR AND IN CONSIDERATION OF the sum lent to the Borrower by the Lender, in the amount of U.S. Dollars (the "Principal Amount") as evidenced by the promissory note (the "Note") dated , the receipt of which the Borrower does hereby acknowledge itself indebted, the Borrower IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to TRUSTEE IN TRUST, the following described real property (the "Property"), located at in the County of , State of , with the following legal description:



TOGETHER WITH all the improvements now or hereafter erected on the Property, and all easements, appurtenances, and fixtures now or hereafter a part of the Property. All replacements and additions will also be covered by this Trust.


BORROWER COVENANTS that Borrower is the legal owner of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower further warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record.


To Protect the Security of this , the parties do hereby agree as follows:





. PROMISE TO PAY. The Borrower, for value received, promises to pay to the Lender the Principal Amount, interest and all fees and costs on the terms outlined in this Trust or in any amendment, extension, or renewal of the Trust and any additional amounts secured by this Trust on the terms elsewhere provided for such debts and liabilities.


. INTEREST. The Borrower agrees to pay the Principal Amount with interest before and after maturity and before and after default at the rate of percent (the "Interest Rate"). The Interest Rate will be calculated from the date this Trust begins on (the "Adjustment Date") and accrues until the whole of the Principal Amount is paid. The Loan will be repaid on the following terms:


a. The Principal Amount with interest will be repaid in consecutive installments of .


b. The Adjustment Date for this Trust is ;


c. The balance, if any, of the Principal Amount and any interest thereon and any other moneys owed under this Trust will be due and payable on (the "Maturity Date").



. PAYMENT LOCATION. The Borrower will make payments to , , , or at such other place as may be designated by Lender at a later date.


. FUNDS FOR ESCROW ITEMS. The Borrower will pay to Lender, on the day periodic payments are due under this Trust, until the Principal Amount is paid in full, a sum (the "Funds") to provide for payment for: (a) any taxes, assessments, or other items which can take priority over this Trust as a lien or encumbrance on the Property; (b) lease payments on the Property, if any; (c) premiums for any and all insurance, including Mortgage Insurance required by the Lender. These items are called "Escrow Items."


The Borrower must notify the Lender of all amounts to be paid under this Section. If the Lender requires, the Borrower must provide receipts evidencing such payments to the Lender. If the Borrower does not make payments on time, the Lender can, at its discretion, make any and all past due payments for Escrow Items and the Borrower will be obligated to repay the Lender for any such amount. The Lender may waive the Borrowers obligation to pay the Lender for any and all Escrow Items at any time by providing written notice to the Borrower. If such waiver occurs, the Borrower must pay directly, when and where payable, the amounts due for any and all Escrow Items. If the Borrower is obligated to pay Escrow Items directly, and the Borrower fails to make payments on time, then the Lender may exercise its rights under this Section and pay for any such amounts and Borrower will be obligated to repay Lender for any such amount.


The Borrower will collect and hold the Funds in accordance with the Real Estate Settlement Procedures Act (the "RESPA"). Lender will estimate the amount of Funds due in accordance with Applicable Law. If there is a surplus of Funds held in escrow, as defined under RESPA, the Lender must provide to Borrower the excess funds in accordance with RESPA. If there is a shortage or deficiency of Funds held in escrow, as defined under RESPA, Lender must notify Borrower in writing and Borrower must pay to Lender the amount necessary to make up the shortage or deficiency.


Upon payment in full of all Funds relating to Escrow Items, Lender will promptly refund to Borrower any excess Funds held by Lender.


. OBLIGATION TO PAY. The Borrower agrees to pay all moneys payable pursuant to this Trust and all additional amounts secured by this Trust without abatement, set-off or counterclaim. Should the Borrower make any claim against the Lender either initially or by way of abatement, set-off or counterclaim, the Borrower agrees that any such claim will not reduce or postpone their obligation to make all payments as provided by this Trust.


. APPLICATION OF PAYMENTS. All payments paid by the Borrower and received by the Lender will first be applied in payment of the interest calculated at the Interest Rate, and second in payment of the Principal Amount. Such payments will be applied in the order in which it became due. However, if the Borrower defaults on payment, then the Lender will have the right to apply any payments received while in default as the Lender so chooses.


only the full and then remaining unpaid balance including the Principal Amount plus Interest.

. ADDITIONAL CHARGES AND ENCUMBRANCES. The Borrower must pay all taxes, assessments, charges, fines, and all other impositions attributable to the Property and all trusts, liens, and other encumbrances on the Property. To the extent that these items are Escrow Items, the Borrower will pay them in the manner provided in Section 4.


. RELEASE AND RECONVEYANCE. Upon payment of all sums secured by this Trust, including the Principal Amount and interest, the Lender will request the Trustee to reconvey the Property and must surrender this Trust and the Note evidencing debt secured by this Trust to Trustee. Trustee must reconvey the Property without warranty to the person or persons legally entitled to it. Such person or persons will pay any recordation costs. The Lender may charge such person or persons a fee for reconveying the Property, but only if the fee is paid to a third party (such as the Trustee) for services rendered and the charging of the fee is permitted under Applicable Law.


. NO SALE WITHOUT CONSENT. The Trustee will not sell, transfer, assign, or otherwise dispose of all or part of the Property or any interest in the Property, without the Borrower's and Lender's prior written consent.


. PROPERTY INSURANCE. The Borrower must keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term "extended coverage," and any other hazards including, but not limited to, earthquakes and floods, for which the Lender requires insurance. The insurance carrier providing the insurance will be chosen by the Borrower. However, the Lender will have the right to disapprove the Borrower's choice, which right may not be unreasonable.


If the Borrower fails to maintain any of the coverage's described above, then Lender may obtain insurance coverage, at Lender's discretion and Borrower's expense. Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of the insurance that the Borrower could have obtained. However, any amounts paid by Lender will become additional debt of the Borrower and secured by this Trust. The amounts paid by the Lender will bear interest at the Interest Rate from the date of payment and will be payable, with such interest, upon notice from Lender to Borrower requesting payment.


All insurance policies must include a standard mortgage and/or trust clause and will name Lender as mortgagee and/or as an additional loss payee, stating that any loss is payable to the Lender. Borrower further agrees to generally assign rights to insurance proceeds to the Lender up to the amount of the outstanding loan balance. If, at the request of the Lender, Borrower will provide Lender (a) a copy of the insurance policy; (b) all receipts of paid premiums and renewal notices.


In the event of loss, the Borrower must give prompt notice to the insurance carrier and to the Lender. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds must be applied to restoration or repair of the Property, if the restoration or repair is economically feasible. If the restoration or repair is not economically feasible, the insurance proceeds will be applied to the remainder of this Trust, whether or not the balance of the Trust is then due, with the excess, if any, paid to the Borrower.


. OCCUPANCY, MAINTENANCE, AND REPAIR. The Borrower will occupy, establish, and use the Property as Borrower's principal residence after the execution of this Trust. The Borrower will not allow the Property to become vacant without the written consent of the Lender. The Borrower will not destroy, damage or impair the Property, allow the Property to deteriorate or commit waste on the Property. Whether or not the Borrower is residing at the Property, the Borrower will maintain the Property in order to prevent the Property from deteriorating or decreasing value due to its condition. Unless repair or restoration is not economically feasible, Borrower will promptly make all necessary repairs, replacements, and improvements to avoid any further deterioration or damage. The Lender may, whenever necessary, make reasonable entries upon and inspections of the Property. If the Borrower neglects to maintain the Property in good condition or allows the Property to deteriorate resulting in decreased property value, the Lender will have the right to make such repairs and improvements as it considers necessary to maintain the Property.


. HAZARDOUS SUBSTANCES. The Borrower will not cause or permit the presence, use, disposal, storage, or release of any hazardous substances on the Property. Hazardous substances include pollutants, wastes, and those substances defined as toxic or hazardous substances by environmental law, as well as the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials. Furthermore, the Borrower will not, nor allow anyone else to do, anything affecting the Property involving any hazardous substances that would materially affect the value of the Property. The Borrower will promptly take all necessary remedial actions under federal, state, and local laws regarding hazardous substances.


. GUARANTEE. Each person or entity signing or joining in this Trust as a Guarantor, Covenantor, or Co-signer agrees to the following terms:


a. Guarantor covenants and agrees that all obligations and liability under this Trust will be joint and several. Additionally, where there is more than one Guarantor, each Guarantor will be jointly and severally liable to the other Guarantor(s) and Borrower.


b. The Guarantor is bound to fulfill the terms and conditions of this Trust, provided the Borrower, as principal debtor, fails to do so;


c. The Guarantor guarantees full performance and release of all the Borrower's obligations under this Trust;


d. If the Guarantor assumes the Borrower's obligations under this Trust, the Guarantor will also obtain all of the Borrower's rights and benefits under this Trust;


e. The Guarantor must indemnify and hold harmless the Lender against all claims, damages, and payments, or loss which might arise or have arisen from the failure of the Borrower and/or Guarantor to pay the amounts owed under this Trust;


f. The Lender will have the choice to proceed against the Guarantor before proceeding against the Borrower to enforce any obligations due under this Trust in the event of default. Furthermore, any enforcement against such obligations can take place before, after, or during any enforcement of the Borrowers debts and/or obligations under this Trust;


g. The Lender can, without the consent or approval of the Guarantor, modify and/or amend the Interest Rate, the Principal Amount and any other term of the Trust or any obligation secured under this Trust. Furthermore, any amendment or modification of the Trust will not release or lessen the liability of the Guarantor;


h. The Guarantor will be bound and subject to any and all changes, modifications, variations, and amendments made to this Trust, regardless of whether such changes were made with or without the consent or approval of the Guarantor;


i. The Guarantor has read this Section and is aware of and fully agrees with its terms and in particular, the terms of this Section.


j. The Lender will serve notice to the Guarantor and any notice will be provided in same manner as provided in the Notice Section as outlines in this Trust.




. DEFAULT. The Borrower will be considered in default under the terms of this Trust if any of the following conditions are met:


a. The Borrower fails to pay the sum of the Principal Amount, interest, or any other amounts due under this Trust.


b. The Borrower fails to perform or comply with any of the terms and conditions or any obligations or responsibilities due under this Trust.


c. The Borrower has given or made, at any time during the loan process, any materially false, misleading, or inaccurate information or statements to the Lender or any other party under this Trust in connection with the loan.


d. If any action or proceeding, whether civil or criminal, is begun that, in Lender's judgment, could result in forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Trust.


e. If a lien is registered against the Property, or if default occurs under any other lien or encumbrance existing against the Property;


f. The Borrower abandons or fails to occupy the Property.


g. The Property or any material part of the Property is expropriated.


. ACCELERATION. If at any time the Borrower should be in default under this Trust, the Lender must give notice to the Borrower. The notice must specify: (a) the default; (b) the action required to cure the default (if allowable); (c) a date, not less than 30 days from the date of the notice, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Trust and sale of the Property. If the default is not curable and/or if the default is not cured on or before the date specified in the notice, the Lender at its option may require immediate payment in full of all sums, including the Principal Amount, interest, and all other amounts secured by this Trust. If the default is cured, the Trust will be reinstated.


The Lender will at all times retain the right to require immediate payment in full in the event of default. Any forbearance on the part of the Lender upon default, which includes but is not limited to acceptance of late payment, acceptance of payment from third parties, or acceptance of payments less than the amount due, will not constitute a waiver to enforce acceleration on default.


. PROTECTION OF LENDER'S INTEREST. If at any time the Borrower fails to perform the covenants and agreements under this Trust, or if there is a legal proceeding that significantly affects the Lender's interest in the Property, or if the Borrower has abandoned the Property, then the Lender may do and pay for whatever is reasonable or appropriate to protect the Lender's interest in the Property and/or rights under this Trust, which includes, but is not limited to:


a. Paying any sums secured by a lien which has priority over this Trust;


b. Appearing in court;


c. Paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Trust; and


d. Paying for reasonable costs to repair and maintain the Property.


The Lender will at all times retain the right to take action under this Section. However, the Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that the Lender will not incur any liability for not taking any or all actions to perform such tasks. Furthermore, any amounts paid by the Lender will become additional debt of the Borrower secured by this Trust.


. REMEDIES. The Lender will have the right to invoke all remedies permitted under Applicable Law, whether or not such remedies are expressly granted in this Trust, including but not limited to any foreclosure proceedings.


If the Lender invokes the power of sale, the Trustee will execute a written notice of the occurrence of an event of default and of the Lender's decision to sell the Property. The Lender or Trustee will mail copies of the notice to the Borrower and Guarantor and will also give public notice of sale in the manner provided by Applicable Law. After the time required by Applicable Law, the Trustee will sell the Property at a public auction to the highest bidder at the time and place and under the terms designated by the Trustee in the notice of sale. The Trustee may postpone sale of the Property by public announcement at the time and place of any previously scheduled sale. Furthermore, the Lender or its designee may purchase the Property at any sale.






. GOVERNING LAW. This Trust will be construed in accordance with the laws of the state of ("Applicable Law"). Applicable Law will include all controlling applicable federal, state and local statutes. All rights and obligations under this Trust are subject to any requirements and limitations of Applicable Law.


. SEVERABILITY. If any portion of this Trust will be held to be invalid or unenforceable for any reason, the remaining provisions will continue to be valid and enforceable. If a court finds that any provision of this Trust is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision will be deemed to be written, construed, and enforced as so limited.


. JOINT SIGNATURES. If the Borrower is more than one person or legal entity, each Borrower who signs this Trust will be jointly and severally bound to comply with all the obligations and liabilities of the other Borrower(s).


. NOTICE. All notice given by either party in connection with this Trust must be in writing. Notice will be considered sufficient when mailed by first class or certified mail to the address of the recipient. The recipient's address will be the property address as stated under this Trust unless another address has been designated. If there is a change of address by any party, that party must promptly notify all parties under this Trust of the change of address. Any notice will be considered effective on the same day that it was sent, unless the day falls on a national holiday, Saturday, or Sunday, in which case, the next business day will be considered as the day of receipt.




IN WITNESS WHEREOF this Trust has been executed by the Borrower and Guarantor in the manner prescribed by law as of as stated above.





By: ___________________________________ Date: __________________




By: ___________________________________ Date: __________________





[Notary Acknowledgment to Follow]


Borrower Acknowledgement


State of   )

County of   )



WITNESS my hand and official seal.


____________________________________ (Notary Seal)

Notary Public


My commission expires



Guarantor Acknowledgement


A notary public or other officer completing this certificate verifies only the identity of the individual(s) who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.


On ____________________ before me, ________________________________, personally appeared , who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

The foregoing instrument was acknowledged before me, by means of ☐ physical presence or ☐ online notarization, this _____ day of ____________________, ______ by , who is personally known to me or who has produced ________________________________ as identification.


I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

About Deeds of Trust

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Deed of Trust FAQs

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  • What is needed to make a Deed of Trust

    Most of the information in the contract is simple to collect such as contact information for the buyer, seller and trustee. Information that may need a bit of research to confirm include:

    • Legal description of the property
    • Date the loan will be paid in full

    For your Deed of Trust to be legal, you'll need to have the document notarized and submitted to the appropriate local county recorder.

  • Deed of Trust vs Mortgage Agreement

    Some states use Deeds of Trust and others use Mortgage Agreements . Both are used to essentially put a lien on a property to secure a loan to purchase that property. The difference is that a Deed of Trust includes a third-party trustee, borrower and lender. A mortgage includes just the borrower and lender. Most often if your state uses mortgages, it utilizes judicial foreclosures, which means the lender files a lawsuit for the right to foreclose. Deeds of Trust most often use non-judicial foreclosures, meaning the lender doesn't have to go through the court system if they want to foreclose. If you have already bought property and are not sure if you have a Deed of Trust or mortgage, you can review your original paperwork or contact your local land records office to see what kind of document you signed.

  • Who usually acts as the Trustee?

    A trustee is a third-party person or entity responsible for acting as an impartial administrator in a non-judicial foreclosure. They are supposed to be fair and not partial to the buyer or seller. Some states even have laws that attempt to ensure that trustees are impartial, rather than partial to the lender or seller. Quite often the trustee is the title company. If the buyer defaults on the loan, the trustee is responsible for selling the property, paying the remainder of the loan, and distributing any profit. Since terms can be costly in the long run, you'll benefit from contacting a real estate attorney to help you ensure your paperwork is correct.

  • What is the power of sale?

    The power of sale is a clause in a Deed of Trust or mortgage agreement that allows the lender or trustee to sell the property to repay the debt if the buyer defaults. Most often this clause is called a power of sale in a Deed of Trust and possibly a foreclosure in a mortgage document. You may also see the term power of sale foreclosure. Whatever it is called, it allows for the sale of the collateral (usually the property) to repay the loan without having to go through the state court system. These types of foreclosures called non-judicial foreclosures are processed much faster than those that involve the local judicial system. Most states allow power of sale foreclosures.

  • What is a deed?

    Often people are confused about the difference between a deed and title. Deeds document the transfer of a title from one person to another. The title signifies ownership of a property. In the real estate business, a deed gives someone the right to claim ownership of the property while the person holding the title owns the property. In simple terms, if you hold the deed, you can act as the owner and improve the property, make alterations and occupy the property. But the title owner still actually owns the property until it is fully purchased. Once the person with the deed fully buys the property, they will receive the title.

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