In real estate finance, a trust deed, also known as a deed of trust, is a security instrument used in many states in place of a mortgage. It involves three parties: the borrower, called the trustor, the lender, called the beneficiary, and a neutral third party known as the trustee.
Under a trust deed, legal title to the property is transferred to the trustee as security for the loan. When the loan is fully paid, the trustee reconveys the property to the trustor, releasing the lender’s security interest.
