Deed of Trust
A security instrument used in most US states that gives a lender a lien on real property as collateral for a mortgage loan, with a trustee holding legal title until the loan is repaid.
In states using deeds of trust (as opposed to mortgages), three parties are involved: the borrower (trustor), the lender (beneficiary), and a trustee (typically a title company) who holds legal title to the property in trust. If the borrower defaults, the trustee can conduct a non-judicial foreclosure sale under the power of sale — a faster and less expensive process than judicial foreclosure used in mortgage states.
The deed of trust contains critical provisions beyond the security interest: the due-on-sale clause (preventing unauthorized transfers), escrow requirements for taxes and insurance, required insurance coverage, restrictions on waste, and the borrower's right to cure a default before foreclosure. For commercial properties, deeds of trust often also contain assignment of rents provisions (the lender receives rent income upon default) and environmental representations. Document intelligence can extract these provisions from lengthy commercial deed of trust packages with page-level citations.
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