A deed of trust to secure assumption is not a property ownership document. Some states, such as Texas and California, use filed deeds of trust instead of mortgages to secure payment of a home loan. Mortgages have a buyer and a lender, but deeds of trust have a third party, the trustee. The trustee holds temporary ownership of the property on behalf of the lender. If the homeowner stops paying the loan, the trustee can go through a streamlined process to foreclose on the home outside the state court system. If a person is transferring his interest in a property, and that property is subject to a home loan secured by a deed of trust, he's still liable for the loan even after he transfers his interest. The seller can use a deed of trust to secure assumption to create a second lien. The second lien is legally inferior to the home loan, but gives him the right to take the property back if the buyer doesn't pay the loan.
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Get a blank Deed of Trust to Secure Assumption form. Go to a local office supply store to get the blank form for your state.
Write in the buyer's name and address on the space for the "grantor." In this case, the grantor is the person receiving ownership interest.
Write in the current owner's name and address on the space for the beneficiary. The beneficiary is the person who took the home loan out but is now selling.
Fill out the trustee's name and address. Use the original deed of trust as reference.
Fill out the home loan information in the assumption section. You need the original loan amount, the original and current lender -- if the loan was assigned -- the date the loan was made, and the recording information for the original deed to the beneficiary and the original deed of trust.
Copy the property description from the original deed of trust on the form in the spot for the description. The description is the land measurements of the real estate in words.
Take the deed of trust assumption form to a notary public. The beneficiary must sign with a notary present so the signature is notarized.
File the assumption deed of trust in the property's county land records. Ask for a copy for reference.
- Original purchase deed
- Original deed of trust
Tips & Warnings
- Notify the lender as soon as you file the deed of trust to secure assumption.
- You usually record the deed of trust to secure assumption at the same time as the deed transferring ownership; some deed of trust assumption forms have blank spots for the recording information for the new property deed.
- You might need other information about the property, such as the property tax account number, to complete the deed form.
- A deed of trust to secure assumption and an assumption deed aren't the same. An assumption deed transfers ownership interest to a buyer who's assuming or taking responsibility for a home loan.
References & Resources
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