Mortgage or Deed of Trust?
All states either use a mortgage or a deed of trust to secure the lender's interests who have loaned money to a borrower so that they may buy real property such as a house, condo / townhouse, commercial building or land. A mortgage is used by some states including New Jersey as a means of a property owner pledging their rights to that property to the lender. The property is the collateral that is described in the loan's promissory note and the mortgage is the document that grants the lender certain rights.
A deed of trust is a document that pledges real property as security for the repayment of a funds that have been borrowed against it. A deed of trust involves three parties where a mortgage only involves two (the borrower and the lender). The three people involved in a deed of trust are the trustor (the borrower), the trustee (title or escrow company) and the beneficiary (the lender). Virginia, among other states, is a deed of trust state.
I have put together a list of states and whether or not they are a mortgage or deed of trust state as well as whether they are a judicial or non-judicial foreclosure state which you can download for free here.
