Texas Deed of Trust

Texas Deed of Trust

Texas Deed of Trust

A Texas deed of trust is a document that is both fairly common, and a required piece of the puzzle when it comes to real estate transactions in the state of Texas. In this case, a Deed of Trust is actually a mortgage which is a little bit different than most states do it. However, a Texas deed of trust has been required since around the early 19th century.

A deed of trust requires the participation of two different and separate parties, a trustor and a trustee. The trustor is the same as the borrower in a traditional mortgage and the trustee would be called the Lender or the lien holder in a mortgage transaction. So, just to be clear, the trustor is the person receiving money for the purpose of buying a home, and is required to repay that money with interest. The trustee is more or less a bank, or private lender who has extended credit to another party in consideration of interest and principal.

In almost all cases, in order to get a Texas deed of trust, a credit application must be filled out by the trustor. With this in hand, the trustee can then do their due diligence to establish the credit worthiness of the trustor. This in turn aids them in making a decision on whether or not to extend the requested credit line or not. As you can see, this process is for the most part exactly the same as a regular mortgage transaction.

In the event of default on a Texas deed of trust, there is a specific process that the trustee must follow to seek relief. After a late payment, the trustee at it's sole discretion can do one of two things. They can pass responsibility of the "loan" onto a successor, or they can file a notice of default. In the event they do file the notice, the trustor is then given ninety days to either bring the loan current, or to vacate the premises. In the mortgage world, this would be known as a foreclosure.

If you are currently considering doing a real estate transaction in the state of Texas, it is advisable to either seek adequate legal representation, or to do some serious research into the laws and regulations that govern a Texas deed of trust. This will ensure that you know exactly what you are getting into before you sign your name on the dotted line.

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