Prevent Foreclosures

Most homeowners much prefer the process of judicial foreclosure but, in some states, they do not have the choice of choosing one or the other.  In California, for example, nonjudicial foreclosure is common and when you buy a home in California, you have to sign a promissory note and a deed of trust. Most people do not know the implication of signing a promissory note or a deed of trust at the time of buying a home. Many think that a deed of trust is just another word for a mortgage. However, legally, a deed of trust is very different from a mortgage.

Consequences of Signing a Deed of Trust

In deed of trust states, such as California, when you buy a home, you usually have to sign a deed of trust. If the borrower defaults on the loan or fails to comply with the terms of the deed of trust agreement, then the deed of trust would authorize the trustee to:

• declare the whole amount of balance of the loan due immediately
• sell the property at a public auction

With a deed of trust, the power is in the hands of the lender, unlike a mortgage where the mortgage lender has to go to court to first to start the foreclosure process.

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