The simplest thing to remember when comparing a deed of trust to a mortgage is that a deed of trust involves three parties, the lender, borrower and a neutral third party that holds the rights to the real estate in question and a mortgage only involves two parties, the lender and the borrower. Both are put in place to protect the lender if the borrower defaults on their loan. Lenders will typically prefer a deed of trust to a mortgage because if a borrower defaults it’s much simpler to foreclose on the property since the judicial process is not needed. Unfortunately, as the borrower the decision on which to use is not up to you. This is determined on the state level. Currently, 30 states plus the District of Columbia use a Deed of Trust, while the other twenty use a mortgage. I’m Stewart Brown, a licensed Mortgage Loan Originator in Palm Springs, California here to simply topics in Real Estate and Mortgage Lending. Please, like, share, follow and subscribe!
