What Is Open Deed of Trust?

Buying a home is fun and exciting, but the experience can be hampered if you do not understand the jargon that gets thrown around by the housing professionals. Understanding what you are signing is one major hurdle on which you cannot afford to stumble.


An open deed of trust is an agreement much like a typical mortgage, in which actual property is held to secure a debt.

Parties Involved

Unlike a traditional mortgage between a borrower and a bank or other lending institution, an open deed of trust has a third party involved--a trustee. The trustee holds the property in a trust as security for the lender.

What It Means

Once the full debt has been paid off, the open deed of trust becomes void, and the property is clearly owned by the borrower. If the debt is not paid as agreed, the trustee may sell the property to recoup the monies owed the creditor.


In most states, the trustee can sell the property without intervention from the court, although a few states have started to recognize a deed of trust with the same regard as a traditional mortgage and will intervene prior to the sale of the property.

Not a Choice

Whether or not you think you would prefer an open deed of trust or a traditional mortgage, unfortunately you do not get a choice in the matter; it's decided by the court and will differ by state.

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