Stage 1 of 4 · The Paperwork Behind the Loan
Deed of Trust
The recorded document that pledges a home as security for a loan and hands a neutral third party the right to sell it if the borrower defaults.
- In plain English
- A deed of trust is the security instrument used in most western states in place of a mortgage. Three parties sign on: the borrower, the lender, and a trustee who holds legal title until the loan is paid.
- Example
- A buyer in Washington signs a promissory note for the money and a deed of trust for the house, and the deed of trust is recorded at the county.
- Why it matters
- This one document is why some states can foreclose without ever seeing a judge. The sale power is already written into it.
- Remember it as
- The note is the promise. The deed of trust is the leverage.
Where it lands in the timeline
Stage 1: The Paperwork Behind the Loan
Every foreclosure is already written into the papers signed at closing, so this phase reads the fine print before the fine print reads you.