What is Deed of Trust?
A deed of trust is the security instrument California uses (instead of a mortgage in many states) to pledge the property as collateral for a loan, involving the borrower, lender, and a neutral trustee. If the borrower defaults, the trustee can sell the property through the non-judicial foreclosure process. It is recorded against the property until the loan is paid.
Example: When a buyer takes a mortgage in California, a deed of trust is recorded naming a trustee who could conduct a trustee’s sale if the borrower defaults.