A deed of trust is different from a mortgage due to the number of parties involved and how the lender can resolve an unpaid loan. If the borrower can’t pay a mortgage, then the lender forecloses. If a loan isn’t repaid with a deed of trust, then it is the responsibility of the trustee. A trustee is a third party, usually an escrow company that pays.

If the borrower can’t pay the mortgage, then it goes through a traditional court process. This is known as a judicial foreclosure. This requires the lender to file a lawsuit. If a deed of trust is the instrument used, then the court process is bypassed. This is known as a non-judicial foreclosure. It is usually a lot faster and less costly. For typical investors and homeowners, this is the better route to choose in selling property. The terms of the procedures are usually laid out in the deed of trust which are subject to state law.