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Ventura Real Estate Lawyers


Real Estate Law & Litigation

Trust Deeds

A deed of trust, like a mortgage, pledges real property to secure a loan. It is used instead of a mortgage in certain states. Depending on the state, the borrower does not really own the property until the final payment is made. 

A trust deed involves three parties: a Trustor (the borrower), a Trustee and a Beneficiary (the lender). In order to get the loan the trustor signs the deed of trust and gives legal title to the trustee.  The trustee receives that legal title, the legal title represents the right to sell the property.

The trustee is usually a title insurance company. They are a neutral third party that holds the title for the beneficiary which is the lender, often a bank.

In title theory states when they say the borrower has title they are referring to equitable title which is what the borrower has.   Equitable title is the present right to possession with the right to acquire legal title once a preceding condition has been met, such as paying off the loan.  In other words, you can live there and enjoy the property but if you mess up you can lose your property.