How is the mortgage document different from a deed of trust?

A mortgage document is often confused with the mortgage loan. But the mortgage is actually a legal document that you, the home buyer, give to the lender proving legal claim of the property. This is done at the loan closing. The mortgage pledges the property as security for payment of the loan. A deed of trust is sometimes used instead of a mortgage. Both a mortgage lien and a deed of trust are recorded in public records.

A mortgage is a document held by the lender until the debt is paid. With a deed of trust, the borrower transfers legal title, temporarily, to the trustee (not the lender) who holds the property in trust as security until the lien is satisfied. The trustee is often an attorney or title agent.

If you pay according to your agreement, both the mortgage and the deed of trust are cancelled. If you default on the mortgage agreement, the lender may foreclose on the property through a court proceeding and sell it to satisfy the debt.
However, with a deed of trust, the trustee has the power to foreclose, at the request of the lender, without a formal court proceeding.

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Wanda J Norge
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