deed of trust

Definition 1

General: Agreement between three parties: a trustor (or grantor), a beneficiary, and a trustee, to establish a trust.

Definition 2

Borrowing: Agreement under which a borrower (the trustor) conveys (see conveyance) the right of ownership (title) of his or her assets or property to a trustee as a security for the sum advanced by a lender (the beneficiary of the trust). If the loan is paid back as agreed, the trustee reconveys the title to the trustor. If not, the trustee has the legal power to sell (liquidate) the assets or property at a public sale to repay the loan. In a deed of trust (unlike in a deed of mortgage) the borrower normally may not apply to courts for an injunction to stop the liquidation.

Definition 3

Securities: Alternative term for bond indenture.