In real estate finance, a First Trust Deed is a legal document that secures a loan by pledging real property as collateral and holds priority over all other trust deeds or voluntary liens against the property. Its superior position means it is paid first in the event of foreclosure, except for certain claims such as property taxes and bonded indebtedness.
Priority is typically determined by the order in which the trust deed is recorded in the public records, with the earliest recorded instrument taking precedence. Because of its first position, a first trust deed generally presents less risk to lenders and often carries more favorable loan terms.
