Escrow & Title
What is a 'deed of trust' and how does it differ from a traditional mortgage in Delaware?
AA deed of trust conveys title directly to the lender; a mortgage does not
BA deed of trust involves three parties (borrower, trustee, lender) with the trustee holding title; a mortgage involves two parties with the lender holding a lien — Delaware primarily uses mortgages✓ Correct
CA deed of trust is used only for commercial transactions; mortgages are for residential
DBoth instruments are identical in Delaware — the terms are used interchangeably
Explanation
A deed of trust involves three parties: the borrower (trustor), a neutral trustee who holds title, and the lender (beneficiary). Upon default, the trustee can foreclose without court action (non-judicial). A mortgage involves two parties with the lender holding a lien. Delaware primarily uses traditional mortgages with judicial foreclosure.
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