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5 Cards in this Set
- Front
- Back
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What is Deed of trust as known as trust deed |
A deed of trust is an agreement between a lender and a borrower to give the property to a neutral third party who will serve as the trustee. The trustee holds title to the property until the borrower pays off the debt. The borrower is the trustor or that’s their legal name and the disinterested third party is called trustee. The trustee holds title(title in real estate is ownership) to the property. Until the borrower pays the debt off. During the period of repayment, the borrower has what’s known as equitable title and the trustee holds legal title. |
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What are the 3 parties relationship of Deed of trust |
Trustor: owner/borrower Trustee: disinterested 3rd party Beneficiary: lender |
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What is the process of deed of trust? |
Step 1. The trustor(borrower/owner) has legal title and transfer it to a trustee using the deed of trust. Step 2. Upon transfer title, the trustee now hold legal title(give somebody the right to transfer title) the trustor has equitable title(allows for use and possession) Step3. If the trustor fulfills terms of agreement, trustee will “reconvey title” 重新传送地契，所有权 back to trustor using a deed of reconveyance. Step 4. If the trustor who is the borrower default on payments, the beneficiary(the lender) will notify the trustee and trustee will foreclosing取消抵押品赎回 use the trustee process（non judicial foreclosure) |
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What is contained in that deed of trust |
1. Deed of trust & promissory note are separate instruments but can be merged into one document 2. Escrow affluent requirements第三方保管账户（哦上课他和borrower‘s taxes, property taxes, and insurance on behalf of a borrower. 3. It will have process if there should be a default of payment 4. How payments are applied 如何支付如何付款 5. hazard insurance requirements 6. Maintenance requirement In fact, a lot of people don’t realize that as a borrower if you aren’t maintaining the property, the lender can actually go in and go through the process of foreclosure to secure the property because it’s not being magnets. It’s losing it value. 7. Mortgage insurance requirement if any. 8. What happens if property is condemned by a governmental body. 9. Acceleration remedies 解决方法 10. Alienation clause or due on sale clause |
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Deed of trust VS mortgage |
1. deed of trust is easier and more efficient in the lender’s view to foreclose 2. Mortgage is a 2-party relationship ( mortgagee and mortgagor) Deed of trust is a 3 party relationship(trustor, trustee and beneficiary) 3. Depends on state where property is located meaning some states are mortgage states and most states are actually the deed of trust state. 4. In Mortgage, the mortgagor who is the borrower retains legal title… the lender who is the mortgagee places a lien against property. In deed of trust the trustor then borrower . received equitable title and the trustee hold the legal title. 5. Judicial foreclosure required, deed of trust: nonjudicial foreclosure foreclosures used, they don’t have to go to court , the trustee upon notification通知 受益人之后of the beneficiary of default, they go to what is called a trustee sale. |
