Trust Deed

Definition - What does Trust Deed mean?

In the state of California and some other states too, a trust deed forms the most common type of instrument used in the financing of the purchases of real estate (other states mostly use mortgages).

What a trust deed does is that it transfers the title to the trustee. A trustee is usually a title company, which then uses it as a security for loan.

Justipedia explains Trust Deed

After the full repayment of the loan, the title is reconveyed or transferred to the borrower. Usually, a trustee will not be involved in the entire arrangement, until and unless the borrower fails to repay the loan amount. If this happens, the trustee may sell the property and pay the lender.

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