How does a mortgage differ structurally from a deed of trust?

Both instruments secure a loan with real property, and the structural difference is how many parties are involved and what that implies for enforcement. A mortgage has two: the borrower, who is the mortgagor, and the lender, who is the mortgagee. A deed of trust has three, adding a trustee who holds title or a power of sale on the lender's behalf. That third party is the reason states differ in foreclosure practice — the trustee's power of sale allows a non-judicial foreclosure, which is faster and does not require a court action, whereas a two-party mortgage generally requires judicial foreclosure. California is a deed of trust state, which is why signing agents there see the three-party instrument almost exclusively. For the agent the practical significance is document identification rather than legal explanation: recognising which instrument is in the package, ensuring it is executed and notarized correctly, and referring any question about foreclosure consequences to the lender or an attorney.

A mortgage is a two-party instrument between borrower and lender, while a deed of trust adds a third party, the trustee, who holds a power of sale on the lender's behalf.

A mortgage involves two parties, mortgagor and mortgagee. A deed of trust involves three, adding a trustee holding a power of sale, which permits non-judicial foreclosure. California is a deed of trust state.

Two Parties or Three. The trustee is the third, and the trustee is why foreclosure differs.

The trustee's power of sale enables non-judicial foreclosure. That consequence is what the structural difference is actually about.

• •Treating the two instruments as interchangeable
• •Explaining foreclosure consequences to the borrower
• •Believing a mortgage need not be recorded