Deeds of Trust

Notes and Deeds of Trust

Part 2 – The Basic Facts About Deeds of Trust

A “Deed of Trust”, or “Trust Deed”, is the document that secures a loan on a piece of property. The Deed of Trust and the secured Note go hand-in-hand and the Deed of Trust is not valid without the Note. (Check our Notes page for all the basic facts)

In an escrow transaction, the Escrow Holder may be requested to prepare the Trust Deed together with the Note if the Lender is a private party who does not have the forms or the expertise to do so. Be sure you consult with your legal counsel once these forms are prepared.

There are two basic types of Deeds of Trust, the Long Form and the Short Form. The Long Form, which could be 20-30 pages long, is the one used by institutional lenders. The Short Form is the one that is most usually prepared by your Escrow Officer. The reason it is “Short” is because the clauses and conditions that appear as standard in the Long Form are incorporated in one document and recorded in all the California counties. By referencing the recorded instrument numbers on the document, the Short form assures that all the rights and obligations of the parties under law and as shown on the Long Form are preserved.

There are three parties, all of which have to be legal entities **, in a Deed of Trust drawn up according to California’s laws:

  • The “Trustor” is the person who borrowed the money (the Payor of the Note)
  • The “Beneficiary” is the person who is lending the money (the Payee of the Note)
  • The “Trustee” is the neutral 3rd party who will issue the release of the loan once it is paid in full

** Legal entity – an entity whose existence is recognized under State and Federal laws. Example – a natural person or an incorporated organization.  Not a legal entity – dbas, Fido, your French poodle.

Whichever type of Deed of Trust is being used there are certain requirements that must be incorporated into this instrument. It must:

  1. Be in writing
  2. Have an amount which matches the amount on the Note(s)
  3. Have a date which matches the date on the Note(s)
  4. Have a complete legal description of the property(s) being encumbered (street address only is not sufficient)
  5. Have the name of the Beneficiary and it must match exactly the name of the Payee on the Note(s)
  6. Have the name of the Trustor and it must match exactly the name of the Payor on the Note(s)
  7. Have the name of the Trustee and the name must match exactly the name of the Trustee on the Note(s)
  8. Have an address for the Trustor for mailing notices in case of default
  9. Have a good return address for Beneficiary for mailing the document back after recording
  10. The instrument must be signed by the Trustor and notarized

If there are certain conditions that have been negotiated between parties and incorporated into the Note, some of them also have to appear on the Deed of Trust to give constructive notice. Those are:

  • Due on sale clause – the loan must be paid in full if property transfers ownership
  • Subordination clause – allows this loan to be subordinated to a new loan to be made in the future
  • Partial Release provisions – partial reconveyance in the event of partial payoff
  • Cross collaterization – for loans that are secured on more than one piece of property

Like the Note, the Escrow Officers may prepare the Deed of Trust but it is up to the client to obtain their own independent legal counsel to review the final documents to make sure that they properly reflect the agreement between all parties.

The Short Form Deed of Trust form can be found on our website under our “For Your Convenience / Forms section”: It is important that you seek your legal and financial counsel with respect to all conditions and preparation of the Note and the Deed of Trust, in and outside of an escrow transaction.

First question: “What is a Note?”


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  1. Drew

    My ex wife forced me to sign a deed of trust on my inherited, separate property. Then she filed for divorce 2 years later.

    There is no note attached to the DOT, and now I want to borrow against my separate property to pay for an attorney. The title company requires a zero demand from ex because shes still technically on title due to the DOT.

    Is the DOT valid if there was never a note? How can I remove cloud from title?

    • Juliana Tu

      Technically, if there is a Deed of Trust then there should be a Note. However, it does not invalidate the Deed of Trust if the Note cannot be located, but it does present a problem to the person who owns the property on which the deed of trust is secured. Unfortunately, to remove the lien from the property you will need to have your ex-wife sign a Substitution of Trustee and Deed of Reconveyance and yes, the title company will need a “zero demand” from her to state that there are no funds owed to her. If she refuses to sign then you will need to get your attorney to look into this matter as he may need to file a lawsuit and if you prevail, then maybe the judge will issue a court order removing this lien.

      Unfortunately, we are not able to give you any legal counsel on how to otherwise eliminate this lien.

  2. Line of credit note funded 5/25/14. Short form deed of trust dated 6/4/14. We did nog sign deed and DATES after our name exactly match Notary date put on HER page. Can Notary Date and Notarize Deed that she did not witness, and signatures look like cut & paste. Can lender do this?

  3. I have an unsecured equity loan dated 5/25/2014. The County Recorder has informed me that a short form deed of trust was notarized TEN DAYS AFTER or line of credit was funded (we paid off small 2nd TD with 5/25/14 funds). The Deed appears to have our signatures “cut & pasted” and absolutely the signature dated next to my wife & my signature were filled in by the Notary, the same day the Notary signed the deed— 6/4/2014. Can a deed be put on a loan ten Days After it was funded? No escrow was used, my private banker filled in credit app etc and We Did Not Sign a Deed of Trust (unless it was one of 50 pages of sign or initial here. Absolutely deed is dated June 4 and Note is dated May 25.. Is this legal?

    • Juliana Tu

      You said that you have an “unsecured equity loan”. “Unsecured” means a loan that is not using a property for collateral and therefore there would not be a deed of trust recorded at the County Recorder’s office. However, you then mentioned that the County Recorder informed you that a deed of trust was notarized. So there is some confusion here. Is your loan secured or is it unsecured? I think you will need to establish that first.

      A deed of trust can be signed and notarized after the funding of the loan. It would not make it illegal. However, if I were the lender, I would not fund the loan until after I obtained signatures of the Borrowers on the Note and the Deed of Trust. The Note and Deed of Trust should be dated the same day, but if they are not, it does not make the process “illegal”, it may be a case of the “private banker” not knowing how to complete the paperwork, particularly if no escrow was used.

      If you are saying that it was not you who signed the Deed of Trust, then are you stating that someone signed the loan paperwork for you? If that is the case, then this is fraud and that is a serious matter.

      Please contact your Lender to find out what happened. You can also contact the notary who notarized your paperwork to get a copy of your signature on the notarial journal and look at the date that you signed. I recommend that you obtain a copy of all the paperwork you signed, including a copy of the deed of trust that was recorded, for review. If you think that someone signed your name on the documents and fraud was committed, then you should report this to your local district attorney’s office.

  4. Sharon Anderson

    My father passed away in 2012. In his files we found a promissory note between he and a sibling for the sum of 81,000 dollars. The note stated that “this note is secured by a deed of trust”. We found the title company that issued the deed of trust. The trust deed and promissory note are available on line for viewing. Is the unpaid balance something heirs are entitled to?

  5. caesar wibawa

    How much does it cost to prepare a trust deed????
    I am lending $20000 to a friend who is using his property as a collateral.
    Thank you

    • Juliana Tu

      My answer is predicated on the assumption that the property is in the State of California, as this is where we operate.

      The cost would vary from company to company. Escrow Companies in California normally do not do these documents unless they are part of a real escrow purchase or sale transaction as their E & O insurance and our governmental oversight agencies do not like it. Here are a few company that can help with the preparation of documents. You might want to give them a call and find out: The Document Center – #(818)541-0901, – #(714)482-2077, or Doc Star Services – #(855) 362-7827.

  6. Janet

    My Deed of Trust and Note say different lenders. The DOT says America’s Wholesale Lenders, the Note says Countrywide Home Loans. Is this a mistake?

    • Juliana Tu

      Countrywide is also known as America’s Wholesale Lender. They are part of the same organization. However, the name on the Note and the DOT should be the same. You should ask your Escrow Company to check into that. Or call your loan officer.

  7. Michael

    Is this correct? In California the person borrowing the money is the only one who signs the Trust Deed. And when the Trustor signs the document it needs to be notarized? Does the beneficiary only sign the Note?

    • Juliana Tu

      Yes, in California the person borrowing the money (Payor/Trustor) is the only one who signs the Note and the Trust Deed. The Beneficiary/Payee does not sign anything. Also, you are correct, the Borrower needs to have his signature on the Trust Deed notarized.

  8. Cindy

    Hi. We live in California. My daughter was just added to the house last year when they refinanced.Her husband just recently passed. She was asked by the lawyer if she was joint tenant. She assumed yes but was told by the lawyer to look at the deed. It states his and her name and husband and wife but doesn’t say joint tenant.
    I am afraid to ask, but what does this mean?


    • Juliana Tu

      Where the vesting for the husband and wife does not clearly specify or is not written out, then my understanding is that it is considered that the husband and wife owned the property as “community property” as the default vesting and not as “joint tenant”. Her husband’s interest would automatically pass to her if he left no will stating otherwise. Please consult with the attorney whether this is correct in your daughter’s case. We are not allowed to give legal or financial counsel.

    • Juliana Tu

      Not knowing the details of your transaction, we can’t say why your deed of trust shows a lesser amount than what is showing on your other loan documents. The documents are usually drawn at the same time, so it’s unusual that they would be different. Please contact your loan officer who handled the loan for you to find out how the error came about.

      We regret that we are unable to help.

    • Juliana Tu

      In California we use the Deed of Trust to secure a loan on the property. The Deed of Trust is signed only by the person(s) borrowing the money (Trustors). It is not signed by the beneficiary of the trustee.

  9. Ed

    My wife and I are currently separated but living in the same house. I will file for divorce in the future. My condo which is my sole and separate property was foreclosed on by the home owners association for unpaid HOA fees. Once these fees are paid the HOA will deed the property back in my name. My wife’s friend is lending us the money. The friend wants both of us to sign a promissory note and a deed of trust. Since we are separated ( not a legal separation) would her signing both documents give her rights to my property? In California once you tell your spouse you want a divorce that is considered the date of separation. My bills are mine hers are hers etc. Would having her as a co-borrower muddy the waters for me since technically we are separated? Would I be able to sell the property if the loan to her friend wasn’t paid in full? We live in Los Angeles county.

    • Juliana Tu

      I am sorry to hear that you allowed the HOA to actually foreclose on the property and take it back. It is pretty rare that that happens. So now, you really don’t own the property at all.

      If the HOA deeds the condo back to you under your name only, then the friend’s promissory Note and Deed of Trust should be issued to you as the sole Payor/Trustor. Your wife would not be a part of this loan but she will need to acknowledge that she has no ownership rights and she will need to sign a Quitclaim Deed.

      If the HOA deeds the property to both of you, then, of course, she will own part of the property and she needs to be a part of the loan.

      You can sell the property and payoff her friend through the sale transaction. If you don’t pay one way or the other, then your friend has the right to foreclose on the property.

      As a settlement services company we are not allowed to practice law. You as well as your wife’s friend should consult with an attorney as to how you should take back the ownership and how to set up this loan. There are legal and financial consequences every step of the way.

      Hope this helps!

  10. Samuel. O. Sangotayo

    A deceased wife who inherited the late husband property desires to prepare a trust deed in favour of the late husband’s family members to secure the payment of the school fees of the three children of the family. What is the format of the document to be prepared?

    • Juliana Tu

      I am not sure I understand. If the wife has died, then what is she doing preparing a Promissory Note to family members?

      If someone were to prepare a Promissory Note for a loan, for whatever reason, there are a few items that need to be present in the Promissory Note:

      • Preparation date of document
      • The loan amount
      • The term of the loan
      • Any interest rate charges
      • How to pay back
      • Name of the Payee (Lender who is giving the loan)
      • Name of the Payor (Borrower who will be paying the loan)
      • Starting date of loan

      If you are going to secure this Promissory Note by using a property as collateral, then you would also prepare a Deed of Trust to accompany the Promissory Note, with the same preparation date, loan amount, name of Payee and name of Payor. You will also need to add the collateral property address and the legal description of the property.

      The preparation of loan documents should be handled by an experienced person, preferably an attorney, and you should get good legal counsel. We are not allowed to give legal or financial counsel, so it is very important that you do get this type of counsel before anything is prepared.

  11. Silvia Salgado

    A friend of mine is adding his sister to the title, His being told that all Hi needs to do is to fill out and notarize a Quitclaim deed, is that true? Can he write 0 on the Documentary transfer tax$ line? what is a Order No:?

    • Juliana Tu

      If the property is in California, to add a person to the ownership of the title of the property the person can complete and sign in front of a Notary Public a Quitclaim deed or a Grant Deed. We normally like people to use a Grant Deed, if he is just adding a person and keeping himself still on the ownership. So your friend would do a Grant Deed from himself (Grantor) to himself and his sister (Grantees) with their vesting, for instance, if he is a single man and she is a single woman, it would be to “John Doe a Single Man and Jane Doe, a Single Woman as Joint Tenants (with rights of survivorship). If this is a gift and there is no consideration, then you would put the exemption in the middle of the document after the legal description and the property address. It would say, “This is a bonafide gift, transfer between siblings, and there is no consideration involved, R&T 11911.”

      There would be no documentary transfer tax to be paid if you have the above stated exemption typed on the Deed. You also don’t need an “Order No.” That is the number of the file, if it is part of a real escrow transaction.

  12. Ling Lee

    I recently found out there is a lien on my property. But the deed of trust and note only signed by my husband.
    I didn’t aware of that and I’m on the title of the property. So , what will happen? how can I do? if i sold the property do I paid for it or only my husband pay for it? If I keep the property, can they sue me or pay to them? is this kind of lien legally entitle to my property?

    • Juliana Tu

      If you and your husband own the property and your husband signed a Note and Deed of Trust by himself and put that on the property, you could conceivably be also liable for this loan. Your husband can legally encumber his share of the property, but usually the Lender will ask that you as the co-owner, be notified and join him in signing at least the Deed of Trust, so that you acknowledge that he is borrowing on the property. I am not sure why this lender did not. If you sell the property you will need to address the issue of who will pay this lien, whether it comes from your part of the proceeds or your husband’s only, or from both of you. You will need to work that out.

      If you do not sell the property and you don’t pay this lien, the Lender could foreclose on the property and that will affect you.

      Please contact an attorney as to what your rights and obligations are.

  13. Cynthia Robinson

    My mother passed away without a will. I went through probate. And now own the home. I was told by the title company that I need a deed. There is no note or loan being transferred. I am not sure who the parties are. I’m the beneficiary I think but who are the the others? I appreciate your help.

    • Juliana Tu

      When you go through probate the Executor of your mother’s estate would do a deed granting the property to you as the Beneficiary of the estate. Please ask the attorney who handled the Probate about getting the property put under your name.

  14. Marie Anton

    To Pamela,
    I’ve also had the same situation as yours, so I wonder who is trying to help on this? There are some that are really scary to believe if we are not aware of the laws. One advocacy told me that “lender didn’t sign the document”, but does it really matter? just like you said do we really have any legal recourse? Were you also approach by this company?

  15. maniyarasu

    property address is matched but legal description doesn’t match compare to full value deed.. In this case mortgage is open or not for our property? please give a solution… asap…

  16. pamela

    Is a deed of trust valid if the lender (beneficiary) did not sign? We were given legal advice stating that there were errors in our deed of trust. Specifically, your lender violated Title 42 USCS 1986 (Action for neglect to prevent), FRPC 9B (Fraud by a confession), Title 18 USCS Section 1001 & 1002 (False statements, concealment), Title 16 USCS 1692E (Fraud & Misleading Statements), Title 15 USCS 78FF (False & Misleading Statements Penalty). Do we really have any legal recourse?
    thanks so much,

    • Juliana Tu

      Your question as to the legality of your deed of trust because there were errors in it is one that has legal consequences. We are a settlement services company and not allowed to practice law. You said that you were given legal advice regarding this matter. I would strongly recommend that you obtain your own legal counsel and not rely on someone else’s legal counsel. By the way, a Deed of Trust is never signed by the Lender. It is only signed by the Trustor – the person who owes the money.

      We regret that we can’t answer your question as to whether you have legal recourse in your case.

  17. Jennie McNamara

    My mother in law holds the note/deed of trust for our property and wishes to cancel the deed of trust/note so the house is ours without further payment. Basically, she is gifting the house to us prior to her passing. How can this be done?

    • Juliana Tu

      Let me first qualify my answer to your question by stating that we are a settlement services/escrow company in California, and most of our transactions are for handling properties in this state. Other states have different laws, rules, regulations and standards of practices that I cannot comment on. If you are from a state other than California, you should ask your question of closing professionals or closing attorneys in your state.

      To cancel/reconvey a Note and Deed of Trust the Beneficiary (your mother-in-law) would hand you the following:

      The original Note and the original Deed of Trust
      She would sign on the back of the Deed of Trust where it says “Request for Full Reconveyance”
      You would submit these 2 documents to the Trustee (you can see who the Trustee is on the face of the Note and the Deed of Trust)
      You will include the fee that the Trustee would charge

      I suggest you contact the Trustee and get their address and their fee cost. Send it all by registered mail.

      Once the Trustee issues the “Full Reconveyance” they will send this form to you.
      Finally, the last step is that you will send this original Full Reconveyance document to the County Recorder’s office where the property is located along with the recording fee.

      Hope this helps!

  18. patrick brady

    if a reciever brings a mortgage holder to court wishing to foreclose does the deed of trust have to be produced in court as a validation of claim

    • Juliana Tu

      Thank you for leaving a question on our Viva Escrow website. Please note that my answer(s) are given in the context that the property is in the State of California only. Other states have different regulations.

      Normally when a loan is not being paid and foreclosure is imminent, the mortgage holder or “Beneficiary” submits the original Note and the original Trust Deed to the Trustee/foreclosure company (nonjudicial foreclosure) or the court (judicial foreclosure). If the deed of trust cannot be found, you can get a certified copy of the deed of trust from the County Recorder’s office to show that there is indeed a lien on the property.


    Do I need a formal agreement with your entity to use your entity as a Trustee on a Deed of Trust between Trustor and Beneficiary.

    • Juliana Tu

      Thank you for leaving your question on Viva Escrow’s website.

      There is no need of a formal agreement with any entity to use them as Trustee on a Deed of Trust. Just naming them in the Note and the Deed of Trust will do the trick. However, we do, of course, recommend that the entity be aware of the responsibilities and duties of being the Trustee. One of those is the responsibility to proceed with a foreclosure of the Deed of Trust if that becomes necessary.

      As a Trustee, Viva Escrow will be the entity to go to when the Note is paid in full and a reconveyance must be issued. However, if the Note must go to foreclosure then we would ask that the Beneficiary re-assign the Trusteeship to a company who is in the business of conducting foreclosures through a “Substitution of Trustee” form. There are certain companies out there which promote their foreclosure services and most title fompanies also have the proper departments to handle it. We at Viva Escrow do not, as we are mainly in the settlement services area of the industry.

      Again, thank you.