When someone finances a home, the lender secures the loan to the home by having the borrower sign either a mortgage or a deed of trust. The lender then records the document in the public records were the home is located. The instrument that these documents secure is most commonly called a promissory note. A main purpose for the security instrument is that if the terms are the promissory note are not met by the borrower, the lender can take ownership of the home and sell to it in order recuperate the amount that was lent.
| State | Mortgage State | Deed of Trust State |
| Alabama | Y | Y |
| Alaska | Y | |
| Arizona | Y | Y |
| Arkansas | Y | Y |
| California | Y | |
| Colorado | Y | |
| Connecticut | Y | |
| Delaware | Y | |
| D.C. | Y | |
| Florida | Y | |
| Georgia | Y | |
| Hawaii | Y | |
| Idaho | Y | |
| Illinois | Y | Y |
| Indiana | Y | |
| Iowa | Y | |
| Kansas | Y | |
| Kentucky | Y | Y |
| Louisiana | Y | |
| Maine | Y | |
| Maryland | Y | Y |
| Massachusetts | Y | |
| Michigan | Y | Y |
| Minnesota | Y | |
| Mississippi | Y | |
| Missouri | Y | |
| Montana | Y | Y |
| Nebraska | Y | |
| Nevada | Y | |
| New Hampshire | Y | |
| New Jersey | Y | |
| New Mexico | Y | |
| New York | Y | |
| North Carolina | Y | |
| North Dakota | Y | |
| Ohio | Y | |
| Oklahoma | Y | |
| Oregon | Y | |
| Pennsylvania | Y | |
| Rhode Island | Y | |
| South Carolina | Y | |
| South Dakota | Y | Y |
| Tennessee | Y | |
| Texas | Y | |
| Utah | Y | |
| Vermont | Y | |
| Virginia | Y | |
| Washington | Y | |
| West Virginia | Y | |
| Wisconsin | Y | |
| Wyoming | Y |
Some states allow both mortgages and deeds of trust.
A main difference is that a mortgage foreclosure proceeding needs to go through the courts. On other hand, a private trust company typically processes a deed of trust foreclosure.
Many states allow either. So, because of the ease of foreclosure, many lenders prefer a deed of trust over a mortgage. If you are going to use one or more of these instruments, it is important to know which should be used in the state where you are intend to use it. The chart above shows which state uses which document and which states use both.
Do you need a mortgage or deed of trust? This is a service that we provide. So, you can reach us at the telephone number located on this page or fill out a contact form.
Many homeowners want privacy of ownership and to keep their names out of the public records. So, we establish Land Trusts, which can keep ownership private. Then a deed is drafted to transfer ownership of the property into the trust. The Garn St. Germain Depository Institutions Act of 1982 does not allow a lender to prevent a homeowner from placing a home in a Land Trust. This is the case for single family homes, duplexes, triplexes or fourplexes where the former owner of the home, who is responsible for the loan, is also the beneficiary of the trust.
