What is the difference between a mortgage and a

deed of trust?
A mortgage is a document that encumbers real property as security for the
payment of a debt or other obligation.

The term "mortgage" refers to the document that creates the lien on real
estate and is recorded in the local office of deed records to provide notice of
the lien secured by the creditor.

The creditor or lender, also called either mortgagee (in a mortgage) or

beneficiary (in a deed of trust), is the owner of the debt or other obligation
secured by the mortgage.

The debtor or borrower, also called the mortgagor (in a mortgage) or obligor
(in a deed of trust), is the person or entity who owes the debt or other
obligation secured by the mortgage and owns the real property which is the
subject of the loan.

In almost all cases, the law of the state in which the property is located
dictates whether a mortgage or deed of trust can be used. Although a deed
of trust securing real property under a debt serves the same purpose and
performs the same function as a mortgage, there are technical and
substantive differences between the two.

A deed of trust is executed by the debtor and property owner, to a

disinterested third person identified as a trustee, who holds the ownership of
the property in trust for the creditor; whereas, when a mortgage is used, title
to the collateral remains in the debtor, and the mortgage creates a lien on
the real estate in favor of the creditor.

In some jurisdictions, the deed of trust enables the trustee to obtain

possession of the real property without a foreclosure and sale, while others
treat a deed of trust just like a mortgage. In the latter jurisdictions, the deed
of trust is governed by the law applicable to mortgages.

The deed of trust requires the trustee to reconvey the property back to the
debtor when the debt has been paid in full. Assignment of the creditor’s
interest does not result in a change of trustee; instead, only the note or other
evidence of debt is transferred and the new owner of the loan acquires the
prior lender’s beneficial interest in the trust.