Deed Of Trust: What Does It Mean?

A deed of trust is a legal instrument that serves as an agreement between a lender and a borrower to place a piece of property into the hands of a third party as a trustee. The third party holds the property until the borrower can pay it off, but the borrow retains all of the responsibilities for maintaining the property. The borrow also holds the title to the property during this time.

This arrangement means that the trustee must be prepared to sell the property in the event that the borrower does not meet their debt obligations on it. It is not a common arrangement, but it is one that may still be explored. It is the responsibility of the trustee to remain neutral in everything related to this property, and they must view what they do as favoring the borrower nor the lender in particular.