Types of Deeds of Trust
There are generally three types of deeds related to trusts. They are the Deed of Trust, the Reconveyance Deed and the Trustee’s Deed. Each of these deeds is a part of the terms of the Deed of Trust.
A trust is an agreement that one person or entity will manage property for the benefit of the involved parties.
Deed of Trust
A Deed of Trust is an agreement between the borrower and lender that a neutral third party will hold the title of a property until the borrower has paid the lender in full for the property.
The Reconveyance Deed is transferred back to the borrower when the borrower pays back the loan borrowed to purchase property. The title is transferred back to the borrower after being held by the trustee.
A Trustee’s Deed is granted by the trustee to the lender to transfer the title to the lender. This is usually done in the case of default by the borrower. This deed must indicate that all procedures were followed according to the Deed of Trust.
The function of the Deed of Trust is to serve as a security measure to ensure timely payment of the debt. The purpose of the other two deeds is to carry out the terms of the agreement of the initial Deed of Trust.
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