Arizona Deeds of Trust
To fully understand the meaning of the deed of trust, you must first understand promissory notes. Arizona home buyers often think of the deed of trust is the contract they are signing with the lender to borrow money to purchase their home. However, that’s actually not the case. It’s the promissory note that contains the promise to repay the amount borrowed.
While he promissory note is basically an IOU that contains the promise to repay the loan, the deed of trust is the document that pledges the property as security for the loan. It is the deed of trust that permits a bank to foreclose if you fail to make the monthly payments or breach the loan agreement in some other way.
Deeds of Trust
A deed of trust, pledges real property to secure a loan. In Arizona deeds of trust are used instead of a mortgage. A deed of trust involves three parties:
- the trustor, aka, the borrower;
- the lender, often referred to as the beneficiary in legal documents;
- and the trustee. The trustee is an independent third-party that
holds their poor legal title to the property. The main function of the
trustee is to sell the property at public auction if the trustor
defaults on payments. Quite often, an Arizona, a real estate lawyer
asked as trustee.
Deed of Trust Foreclosure
The judicial foreclosure is the process used with deeds of trust. In a nonjudicial foreclosure, the bank can’t foreclose without going to court so long as the deed of trust contains a power of sale clause.
If you need help from an Arizona real estate attorney then contact the Dunaway Law Group at office@dunawaylg.com or call us at 480-702-1608.