Property Trust Deed – What Does It Signify ?

What is a property trust deed ?
A property trust deed is a document that is used when a property is mortgaged for loan. There are three parties involved in the process. The first party is the one who applies for the loan. The second party is the financial institution that acts as the lender. The third party is the one that acts as a trustee between the lender and borrower. The trustee acts as the security holder for the lending transaction until the loan period expires.

In this case the property trust deed remains with the trustee. The borrower is called trustor and lender is called beneficiary. After the loan period expires, the property trust deed becomes null and void. This is a very common practice that is followed in all states of Unites States.

How does the property trust deed system work ?
The property trust deed operations involve a fourth party as well, which is the one who sells the property for which the borrower requires the mortgage loan. In this case, the lender hands over the money to the borrower in order to purchase the property. The seller makes a deed and hands over the property to the borrower, who is also the buyer of the property. The buyer of the property then has a property trust deed prepared holding the property in trust of the trustee, who holds the property in trust of the lender until the buyer repays the borrowed amount. The buyer could request for copy of the property deed. These transactions are different from mortgage transactions because they involve three and four parties, unlike mortgage transactions that involve just two parties.
Property Trust Deed
Where is the property trust deed recorded ?
Property trust deed is recorded usually in the office of the county that encompasses the jurisdiction of the property. The clerk in the country records the trust deed. When the property trust deed is recorded, it acts as a declaration that property is now settled and the deal has been closed. Since the trustee holds the papers of property ownership, it safeguards it on behalf of the lender until the entire borrowed amount is repaid, after which the property deed documents are handed over to the borrower, who now becomes the sole owner of the property. However, the lender has to legally send a request in writing to the trustee to hand over the property to the borrower.

Places which follow this system
The states in the United States such as Alaska, Arizona, California, Colorado, Columbia, Idaho, Maryland, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Carolina, Oregon, Tennessee, Texas, Utah, Virginia, Washington and West Virginia follow this property trust deed system.