REFinBlog

Editor: David Reiss
Brooklyn Law School

January 29, 2020

Deed of Trust vs. Mortgage

By David Reiss

photo by Taber Andrew Bain

LendingTree quoted me in Deed of Trust vs. Mortgage: Key Differences. It reads, in part,

Foreclosure process

Each type of security instrument leads to a different type of foreclosure process. Deed of trust states typically have a non-judicial foreclosure process. “The trustee has the power under the terms of the deed of trust to actually sell the property,” said David Reiss, professor of law at Brooklyn Law School and real estate expert. “That can happen in some jurisdictions in a matter of weeks or a matter of a few months.”

A deed of trust foreclosure doesn’t involve going to court. In mortgage states, though, the lender must get a court order to foreclose on a home. This is called a judicial foreclosure. “In many jurisdictions, particularly in New York and New Jersey, [a judicial foreclosure] could take years to actually do,” Reiss said. “From a lender perspective, that’s not so great.”

Your state’s laws will determine which security instrument you use and which type of foreclosure process lenders are required to follow. Some states allow both types of foreclosures, but non-judicial foreclosures are more common than judicial foreclosures. The states that primarily use a non-judicial foreclosure process are Alabama, Alaska, Arizona, Arkansas, California, Colorado, Georgia, Idaho, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, Oregon, Rhode Island, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wyoming and the District of Columbia.

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