Deed Of Trust

Texas Deed of Trust and Foreclosure ## The Deed of Trust Structure Texas uses the deed of trust rather than a traditional mortgage as the primary instrument for securing real property loans. Unlike a mortgage (two parties: borrower and lender), the deed of trust involves three parties: - Trustor: The borrower. Conveys bare legal title to the trustee as security for the loan. Retains equitable title and possession of the property. - Trustee: A neutral third party (typically an attorney or title company officer). Holds bare legal title and has the power to sell the property if the trustor defaults. Reconveys the property to the trustor when the loan is repaid. - Beneficiary: The lender. Holds the beneficial interest secured by the deed. The three-party deed of trust structure enables non-judicial (statutory) foreclosure — the lender can foreclose without going through the courts. This is substantially faster and less expensive than the judicial foreclosure required in many other states. ## Texas Non-Judicial Foreclosure Process 1. Notice of Default: Given to the borrower after missed payments, with an opportunity to cure. 2. Notice of Sale: Must be sent by certified mail to the borrower, filed with the county clerk, and posted at the county courthouse — at least 21 days before the sale. 3. The Sale: Must occur on the first Tuesday of the month between 10:00 a.m. and 4:00 p.m. at the courthouse of the county where the property is located. It is a public auction; the winning bidder pays cash and receives a Substitute Trustee's Deed (not a general warranty deed — no title warranty). No right of redemption: Unlike many states, Texas borrowers have **no statutory right…