What is a deed of trust?

A deed of trust is a legal document used in property law in California that establishes an agreement between a borrower and a lender. It is often used in the context of real estate transactions, as it ensures that if the borrower fails to make payments on their loan, the lender still has a legal right to the property. A deed of trust establishes a “trustee” who holds the title to the property in trust. The trustee is responsible for ensuring that the lender is paid according to the terms of the loan agreement. In most cases, the trustee must take action to foreclose on the property if the borrower fails to make the required payments. The deed of trust also outlines the obligations of the borrower to the lender. These include paying a certain interest rate on the loan, making payments at agreed-upon intervals, and any other conditions that have been negotiated. Before signing a deed of trust, it is important to read it carefully and make sure that the borrower fully understands their responsibilities under the agreement. In California, the deed of trust is typically recorded in the county’s public records so that it is binding on the parties. It is an important legal document and should be handled with care.

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What is a deed of trust?

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