Real Estate Term of the Day: Deed of Trust

Real Estate Term of the Day: Deed of Trust

DEED OF TRUST – an instrument used in the State of Colorado in lieu of a mortgage (a written instrument that creates a lien upon real estate as security for the payment of a specified debt).  Legal title to the property is vested in one or more trustees to secure the repayment of the loan (Barron’s Dictionary of Real Estate Terms)

According to the Douglas County Public Trustee’s office, a deed of trust is a three party instrument used to create voluntary liens in real estate. The parties to a Deed of Trust are the Grantor, who is the property owner, the Beneficiary, who is the lender and the Public Trustee, who holds certain powers of foreclosure and release.

A recorded (by the County Clerk and Recorder) Deed of Trust is a legal record of the lien against the owner’s property. When recorded a Deed of Trust creates a lien against the Grantor’s property. When the terms of the Deed of Trust are satisfied, a request of Release of Deed of Trust must be recorded to remove the lien from the property.

See also: example of a Colorado Deed of Trust (via Freddie Mac)


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