Your browser will redirect to estate vs trust requested content shortly. Hard Money FAQs Why Hard Money Loan?
Both are used in bank and private loans, create liens on real estate, and are considered, by law, evidence of a debt as they are generally recorded in the county in which the property is located. Hard money lenders tend to operate more in trust deed states because the foreclosure laws are more flexible. Here’s the scoop Both documents, a mortgage and a trust deed, use real estate to secure repayment of a loan. The difference between the two documents relates to the number of parties involved in the lien transaction, the name of the documents, and the method of foreclosure that is used if the underlying debt is not paid per the terms of the loan agreement. In most states, law dictates whether a mortgage or a trust deed is recorded, but some states permit either document to be used.
Simply put, a promissory note is a promise to pay a debt at agreed upon terms. A promissory note itself is not secured by the real estate. A mortgage is enforced by a court supervised foreclosure process which is known as a judicial foreclosure and the process includes the lender filing a lawsuit against the borrower. This is called a non-judicial foreclosure or trustee’s sale. If the trustee conducts a foreclosure sale, title is conveyed from the trustee to the new owner via a document called a Trustee’s Deed.
This process requires the lender to file a lawsuit in order to obtain a judgment. It is time consuming and expensive, but it does have an added benefit for the lender. This is becoming the most common process for foreclosure because it is faster and less expensive. Then, if the borrower doesn’t bring the loan current, the property goes to a trustee’s sale. The Private Money Lending Guide website, its owners, contractors, distributors and their respective representatives do not provide tax, accounting, investment or legal advice and make no guarantee as to the effectiveness or success of any investment or tax strategies discussed herein.
Please consult your own independent adviser as to any questions you have or decision you are contemplating. The Benefits of a Revocable Living Trust vs. Making a decision between a revocable living trust vs. A revocable living trust can be “undone” if you change your mind. If you elect to form a revocable living trust rather than write a will, you’re always free to reverse your decision later. You may not want to, however.