COMPARISON OF A MORTGAGE WITH DEED OF TRUST
1 Chapter 10
CHAPTER 10: Deed of Trust
I, Discuss and dene the Parties to a Deed of Explain the purpose of the parties and their role
in the
Trust mortgaging procedure.
II. Reconveyance
A. Default Does your state recognize the reconveyance
procedure?
B. Discuss the Trustee’s role
III. Explain the requirements of the Deed of Trust
Document
A. Power of Sale
B. Assignment of Rents
C. Foreclosure Emphasize how the deed of trust is used in your
state.
D. Trustee Appointment
IV. Jurisdictions Using Deed of Trust Explain the benets to a lender utilizing the
Chapter 10 2
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back back Topic Teaching Tips
159 162 Opening Remarks Start this chapter by comparing a mortgage (a two-party
instrument) to a deed of trust (a three-party instrument).
159 163 Parties to a Deed Summary:
of Trust Borrower = Trustor or Grantor
Lender = Beneficiary
Third Party = Trustee
159 164 Deed of Trust terms
159 164 Naked or Bare Title Stress: The title conveyed by the borrower to the trustee is not
the actual title, but rather naked title.
166 170 Wrap-Up 1. What is a deed of trust? (A written contract whereby a
borrower agrees to use his property as collateral for a loan.
Stress that a Deed of Trust is not a loan, nor does it transfer
the property’s ownership.)
2. Under a deed of trust, who is the Trustor? (Borrower), the
Beneficiary? (Lender), the Trustee? (Third Party)
3. That title is held by the trustee? (naked or bare title)
Class Activity If you are in an area which relies on Deeds of Trusts, have
students bring theirs in or find examples on the Internet.
Help them find the various clauses discussed in this chapter.
See if the Request for full Reconveyance is printed on the
form itself. Use Internet as resource here.
In this chapter we will discuss the deed of trust as a mortgage instrument,
how it differs from traditional mortgage theories, and an analysis of the
parties and the roles they play, both in creating the mortgage and during
the foreclosure process.