Deed of Trust
A security instrument commonly used in Texas that pledges real property and can give a trustee a power of sale after default.
Quick flashcard
What does Deed of Trust mean on the Texas real estate exam?
Answer: A security instrument commonly used in Texas that pledges real property and can give a trustee a power of sale after default.
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Deed of Trust definition
A deed of trust is the security instrument Texas uses instead of a traditional mortgage. The borrower keeps title and signs a deed of trust that conveys a power of sale to a neutral third party, the trustee, to hold for the lender as security for the debt. The promissory note creates the debt; the deed of trust secures it.
Because the deed of trust contains a power of sale, default lets the trustee conduct a non-judicial foreclosure without a lawsuit, following the notice and posting rules of the Texas Property Code. This is the key practical difference from states that require judicial foreclosure of a mortgage.
Source basis
Definition checked against the official sources below on .
On the exam
Exam trap
Tested in
Financing & Settlement (7 of 80 National)
From definition to recall
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Try 5 free questionsThis definition is Texas real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.