trust deed
Noun: A legal document that formally transfers the ownership of a property (or other asset) to a trustee. This transfer is typically used to provide security for a debt or other obligation, such as a mortgage or a loan. The trustee holds the property "in trust" for the benefit of the lender until the debt is repaid.
A trust deed is used in real estate and financial transactions to create a security interest. It involves three parties: 1. The trustor (or borrower), who transfers the property. 2. The trustee, a neutral third party who holds the legal title. 3. The beneficiary (or lender), who receives the security interest.
If the borrower defaults on the loan, the trustee has the power to sell the property to repay the lender, often through a non-judicial foreclosure process.
- In real estate: "To secure the loan, the buyer signed a trust deed granting the bank a security interest in the property."
- Describing its function: "The trust deed names a title company as the trustee responsible for holding the legal title."
- In a legal context: "The lender recorded the trust deed with the county to make the lien against the property a matter of public record."
- Deed of Trust: This is a common synonym for trust deed. The terms are used interchangeably in many jurisdictions, particularly in the United States. "They used a deed of trust instead of a traditional mortgage for the transaction."
- Contrast with a Mortgage: While both secure a loan, a trust deed involves a three-party arrangement with a trustee, whereas a standard mortgage is a two-party agreement directly between the borrower and lender.
- Deed of Trust (n): A direct synonym for a trust deed.
- Trustor (n): The person who creates the trust and transfers the property (the borrower).
- Trustee (n): The party who holds legal title to the property under the terms of the trust deed.
- Beneficiary (n): The party who benefits from the trust, typically the lender.
- Security deed
- Deed of trust
- In trust: A phrase describing how the trustee holds the property. "The title is held in trust for the beneficiary until the loan is satisfied."
- Reconveyance deed / Deed of reconveyance: The document issued by the trustee to transfer the title back to the borrower once the loan is fully paid, releasing the property from the trust deed.
- a written instrument legally conveying property to a trustee often used to secure an obligation such as a mortgage or promissory note