Security Interests in Real Property
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Deeds of Trust
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A deed of trust is a document that reflects a specific financial interest in the title to a piece of real property. That specific financial interest is transferred to a trustee, who is a holder of property on behalf of a person who is entitled to the benefits of the trust (i.e. the beneficiary). The trustee then holds the deed of trust as security for a loan executed between two other people.

If the debtor defaults on his or her required payment, the lender can instruct the trustee, or the holder of the property, to foreclose the deed of trust by sale. This is different from mortgages, where the sheriff is required to conduct a judicial foreclosure sale. If the debtor fulfills his obligation and repays the loan, the obligation is released.

Next, let’s take a closer look at installment land contracts.

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