Deed of Trust Loan - Posted by Laney

Posted by BTI on May 22, 2007 at 23:30:34:


By using a deed of trust to secure the loan, the lender can foreclose without resorting to a judicial foreclosure, it usually quicker and less hassle.


Deed of Trust Loan - Posted by Laney

Posted by Laney on May 10, 2007 at 23:48:20:


I wanted to get some thoughts (validation) on a loan I?m thinking about giving secured by a deed of trust. Here are the details:
$10,000 to an investor who will have me sign a deed of trust on a home she’s selling in Northern Calif. She sent me the appraisal and preliminary report from the title company. Should close in 2 weeks, at which time I will get the loan back plus $800.00 fee we agreed on. She and I will also sign a promissory note as well as a demand letter for the title company.

I should have my money back in 2 to 4 weeks (at latest) per our agreement. This is my first taste test of any kind in real estate investing and I wanted to get other?s thoughts so I can make an informed decision and learn from this experience.

Thank you.

Re: Deed of Trust Loan - Posted by elaine

Posted by elaine on May 15, 2007 at 18:36:07:

Just what is a deed of trust? Not being from CA I have always wondered. Why is a so called deed of trust any different than a regular deed in any other state? What are the advantages and disadvantages?

Re: Deed of Trust Loan - Posted by Laney

Posted by Laney on May 15, 2007 at 21:17:27:

It’s a document used in place of a mortgage. A form of security instrument conveying title in trust to a third party covering a particular piece of property. It is used to secure the payment of a note.

Re: Deed of Trust Loan - Posted by elaine

Posted by elaine on May 18, 2007 at 17:58:50:

Thanks. I understand that, but what are the differences from there? It’s called a deed of trust, but does the buyer really have the deed? If not why not? Does he only get the deed when the mortgage is paid? If that is the case how can the buyer (owner) do anything else with the property? Or maybe the buyer is not really the owner? It seems a bit complicated to me.

Re: Deed of Trust Loan - Posted by BTI

Posted by BTI on May 18, 2007 at 23:49:30:


Lets go back to the beginning to a deal in say California. I buy a house and the seller gives me a property deed for the property. I keep this property deed and title to the property until I sell the property just the same as in any other state.

Now a deed of trust is not the same as the property deed, it is a separate security device to secure a note or some performance. As an owner I can get a loan against the property, the lender will give me the money after I sign a promissory note and a deed of trust to secure the note. I still have my deed to the property, but the lender has a deed of trust which is a lien against my property until I pay it off.

In short I’ve got an apple and the lender has an orange, not the same thing. Of course there are other factors but you need to grasp that concept first.


Re: Deed of Trust Loan - Posted by elaine

Posted by elaine on May 21, 2007 at 17:51:45:

I grasp that concept well. So you are telling me I get a regular deed when I buy the property, but if there is financing there is a mortgage secured by a so called deed of trust that allows the mortgage company to take title if I do not pay the mortgage according to the terms. Does that give the morgage company any more or less rights than a straight mortgage and loan in an other than "Deed of Trust States? Isn’t the Mortgage secured by the property itself like any mortage in an other that deed of trust state? If so why do you need a Deed of Trust? to me the Deed of Trust sounds like an obfuscation? Why have it? Maybe it has to do with the foreclosure proceedings?

Re: Deed of Trust Loan - Posted by Max-Va

Posted by Max-Va on June 03, 2007 at 16:52:35:

Let me jump in here.

A mortgage and a Deed of trust do the same thing. They secure a note with real estate.
State laws reguire the different documents. Judicial foreclosures states require a mortgage. Non Judicial states use a deed of trust. It is the same thing only the way they work with state laws is the difference.