Re: What is a T.D.? TRUST DEED - Posted by Bill Gatten
Posted by Bill Gatten on June 03, 1999 at 19:05:56:
Lisa, in the states (in most some states) a loan is secured by means of what’s referred to as a “Trust Deed (or “deed in trust”).”
Essentially, in such an arrangement, the property’s legal title (its “Grant Deed”) is vested with the borrower; however, a second deed is placed into a beneficiary directed trust arrangement (not a true trust, but consider it so for simplicity’s sake), and the lender becomes the trust’s Beneficiary (the borrower being the Grantor) and names another 3rd party entity (usually a title insurance company) as the Trustee… to hold the “naked” legal title in trust (the property’s “beneficiary title” remains with the borrower).
The verbiage within the security instrument (loan document) is such that in the event of default by the Grantor (the borrower), the trust’s beneficiary (the lender) has the sole right to direct the trustee to foreclose and sell the property in order to cure the default.
This is a shortened version, but hopefully it answers your question.