Mortgage Loan in United States

Prevalent Practices

In most of the states in United States, first mortgage creates alien relating to the title of the property. Sale of property in lieu of debt due will not be possible without a judicial proceeding to that effect giving the debtor a fair chance in case he or she becomes a defaulter in payment of the debt dues outstanding.

Mortgage Deed

Secure debt deed is one that is used in states like Georgia. Construing the actual conveyance of properties as security in debt transactions, execution of such deeds passes the right, title, and interest of the property to the lender. Debtor however continues to have the equitable rights of enjoying the property so long as he or she complies with the debt obligations.

Appropriate recording of the security deeds under the law of the land is mandatory. No specific time limits have been set up for recording of the deed but failure to record it timely may affect adversely the priorities. Consequences of such failure would affect the enforcement of debt against the property put as security.

Trust Deed

Deed that is executed by the borrower in favor of the trustee for securing debt is called a trust deed. Presently the state laws do not permit complete transfer of the title through such deeds and permits creation of a lien irrespective of the terms and conditions of such deed. Normally such deeds are executed for borrowing money for home buying. Trust deed differs from the mortgage since foreclosure is possible through non-judicial sales as well as judicial pronouncements.

Debt trust deed and regular trust instruments

In states like California, most of the mortgages are such deeds of trust. Since non-judicial foreclosure sales are permitted in their cases, they permit faster processes of foreclosure in comparison to other types of mortgages. Difference of trust deeds that are used for debt repayment from the regular trust instruments is that they do not create legal trust arrangements under the law of the land