Deed or Deed of Trust?

When I meet with clients for the first time, I almost always ask if they own their house.  Sometimes the response is, “No, I’m still paying for it.”  When that happens, I try to explain to that person the difference between a Deed and a deed of trust.

If you own real estate, you have the Deed to that property.  A Deed is a legal document recorded with the county that is proof of ownership of that land.  Often, when you buy a piece of land, you will get what is titled a Warranty Deed.  The grantee of a warranty deed is the owner of that property and now has the rights, privileges and obligations that go along with real estate ownership.
So, what is a Deed of Trust?  It does not convey ownership.  In the simplest terms, the Deed of Trust is proof that you have a mortgage on your house.  Anyone who has a house and has a mortgage payment on their house probable has a Deed of Trust.  A deed of trust gives the mortgage lender a security interest in the property, not an ownership interest in the property.  This kind of deed will allow a mortgage lender to foreclose if mortgage payments are not made, but it does not mean the mortgage company owns the property.
So, a Deed is proof of ownership for real estate and a Deed of Trust is proof that there is a debt owed which is secured by the real estate.  Most people who own a house have both but look forward to the day when they only have a Deed.
By Addam Fara, W M Law Attorney