Deed Of Trust Legal Meaning and Definition

Here is a simplified definition of the legal term Deed Of Trust.

Deed of Trust (noun): A legal piece of writing that commits a property as security for a loan. This arrangement is often used instead of a traditional mortgage in certain states. Here's how it works: the homeowner (called the trustor) passes the property title to a third-party trustee who holds it in trust for the lender (the beneficiary). The trustee ensures the return of the title to the trustor once the loan is completely paid off. However, if the homeowner can't keep up with the loan payments, the lender can request the trustee to start a foreclosure, potentially leading to the lender receiving the property title or getting paid in another way.