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What is a deed of trust used to secure assumption?

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Quick Answer

A deed of trust to secure assumption is a document that creates a second lien on a piece of property, explains Legalzoom. The second lien gives a seller the right to take back the property if the loan isn't paid by the buyer.

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Full Answer

In a divorce where one spouse is awarded the house a deed of trust to secure assumption is one of two real estate transfer documents used, according to Morgan Law Firm. The person taking the house signs this document, and it effectively says he promises to pay the existing mortgage. If he falls behind or defaults on payments this document gives the other person recourse against him.

In some states payment on a home loan is secured with a deed of trust rather than a mortgage, notes Legalzoom. A mortgage has two parties but a deed of trust includes a third party called the trustee. The trustee has temporary ownership on behalf of the lender. If payments on a loan stop, a trustee can foreclose on a home outside the state court system. A person transferring interest in a piece of property with a loan secured by a deed of trust is still liable for payments even after interest is transferred.

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