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Deeds of Trust are not as common as they once were. Although they serve the same purpose as a land security agreement, these agreements are not the same as mortgages. In a traditional mortgage, everyone involved has an interest in the outcome. A Deed of Trust, by contrast, involves an impartial trustee.

The trustee must be impartial in this arrangement because he must be prepared to sell the property to satisfy the debt if the borrower defaults. All states require that the trustee remains neutral to ensure that the trustee does not try to alter the price to benefit either the borrower or the lender. A foreclosure sale under a Deed of Trust does not have to follow the same procedures as a judicial foreclosure, which requires stricter parameters and a higher level of accountability; no judicial supervision is required for a foreclosure sale under a Deed of Trust in most states.

Once the sale is complete, the trustee will distribute the proceeds between the borrower and the lender. The lender gets whatever funds are required to satisfy the debt, and the borrower receives anything in excess of that amount. This setup allows the lender to purchase the property, closing out the debt and satisfying all of the requirements of the deed. This is another detail that separates the Deed of Trust from a typical mortgage, since typical mortgages have specific legal requirements in addition to the sales.

Please note: This page offers general legal information, not but not legal advice tailored for your specific legal situation. Rocket Lawyer Incorporated isn't a law firm or a substitute for one. For further information on this topic, you can Ask a Legal Pro.


Written and Reviewed by Experts
Written and Reviewed by Experts
This article was created, edited and reviewed by trained editorial staff who specialize in translating complex legal topics into plain language.

At Rocket Lawyer, we believe legal information should be both reliable and easy to understand—so you don't need a law degree to feel informed. We follow a rigorous editorial policy to ensure every article is helpful, clear, and as accurate and up-to-date as possible.

About this page:

  • This article was written and reviewed by Rocket Lawyer editorial staff
  • This article was last reviewed or updated on Dec 19, 2022

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