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The deed of trust refers to a binding agreement between a lender and a borrower. It is mainly used to transfer the ownership of a borrower’s property to a neutral third party. This third party is legally referred to as the trustee. The main purpose of this transfer is to ensure the payment of a debt taken by the person. The deed of trust is also called the trust deed or Potomac mortgage. Given below are some of the popular questions about the deed of trust: How does a deed of trust function?
A trust deed is a general agreement that involves three parties – the lender, borrower and a trustee. As per this deed, the borrower may transfer the right of ownership to his/her property to the trustee to secure a loan taken from the lender. The ownership of the property may be transferred back to the borrower if he/she repays the loan as per the clause given. If the loan is not repaid, the trustee can sell or liquidate the property and use the money to repay the loan. What does a release of deed of trust mean?
A deed of trust may come into picture if the borrower takes a new loan to repay the previous loan. In such a situation, the lender of the first loan may have to release the deed of trust to the new lender so that he/she can file a new deed of trust for the second loan. What is the process to transfer the original deed of property and assign a deed of trust?
The process to transfer the original deed of property is to draft a new deed and file it with the records office. This will enable the transfer of ownership of a property to a new person. It will also give the new owner the right to collect the debt. What is the process to initiate a foreclosure? How long will the entire process take? Should one be legally represented to complete the procedure?
It may be possible for a person to carry one with a foreclosure proceeding without any legal representation. In most cases, it may take up to 60 days for the proceedings. However, there could be a delay depending on the circumstances. A trustee may have to conduct the foreclosure proceeding. The substitution of trustee document should be signed by both the parties involved and submitted to the Registry of Deeds. The parties may be sent a notice of hearing when the foreclosure process starts. However, there may be a slight difference in the process depending on the state in which the foreclosure is happening. In some states, the person may have to file a petition for the foreclosure. A hearing will be held by the clerk of the superior court. The trustee may have to prove certain things vital to the case in this hearing. Some of these things are proof of a valid debt, a default of the debt, a right to foreclose the property under the given norms, proof of the notice of hearing being given and a notice of the sale. The trustee may be given the right to sell the property once he/she is able to prove his/her claim. The trustee may have to post the notice of the sale at the court house at least 20 days before the sale date. He/she may also have to give the same information in local newspapers at least once a week for two consecutive weeks before the sale date. The notice of sale should also be sent to all the parties involved in the case. The property will then be foreclosed in an auction. Many states in the US may have a deed of trust while some others may acknowledge a mortgage. A deed of trust is a complex document which may be difficult to understand. You may ask a lawyer if you have any doubts or questions about the deed of trust.
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