In some states, a deed of trust, also called a trust deed, is used in place of a mortgage. A deed of trust accomplishes the same goal as the mortgage, but it is structured differently. The deed of trust is a three-party document. The borrower is called the trustor and the lender is called the beneficiary. The deed of trust is not made directly to the beneficiary, but is instead given to a third party called a trustee. The trustee acts in only two situations.
1. If the deed of trust is satisfied and the loan paid off, the trustee issues a reconveyance to the trustor, releasing the lien.
2. If the terms of the agreement are not met (default), the trustee acts for the beneficiary to sell the property.
A reconveyance is a legal term for returning something, such as the deed for your home to you.
The term mortgage will be used for both mortgages and deeds of trust.
Deed of Trust States
Alaska Arizona California Mississippi
North Carolina Virginia Washington, DC
Alabama Arkansas Connecticut Delaware Florida Hawaii Indiana Kansas Kentucky Louisiana Maine
New Jersey New Mexico New York North Dakota Ohio
Oregon Pennsylvania Rhode Island South Carolina Vermont Wisconsin States That Use Both Deeds of Trust and Mortgages
Colorado Idaho Illinois Iowa Maryland Montana Nebraska
Oregon Tennessee Texas Utah
Washington West Virginia Wyoming
Note: Georgia uses a document called a security deed.