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Episode 10: What Is a Deed of Trust (And Why Not Knowing Could Cost You a Fortune)
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What happens if you lend money on real estate without getting paid back? In this episode of Growing The Money, Rich Lennon explains why understanding a Deed of Trust is critical to protecting your investment. He breaks down how a deed of trust works, who the key parties are, and what legal language must be included to secure your money properly. Rich also highlights the difference between a mortgage and a deed of trust, and why failing to know these details could cost lenders thousands of dollars.
What You’ll Learn in This Episode:
(00:36 – 01:51) Importance Deed of Trust to Get Money Back
(01:51 – 02:56) Deed of Trust vs. Mortgage: Judicial vs. Non-Judicial States
(03:04 – 03:55) Trustees’ Role and Foreclosure Process Explained
(04:06 – 05:28) The Three Parties in a Deed of Trust and Their Roles
05:28 – 06:59) Clear Property Descriptions and Importance of Schedule A
(06:59 – 08:33) Financial Obligations: Including Loan Terms in Deed of Trust
(08:33 – 10:09) Borrower’s Ongoing Responsibilities to Lender
(10:48 – 11:28) Defaults and Foreclosure Procedures in the Deed of Trust
(11:28 – 12:59) Cross Default, Cross Collateralization, and Due-on-Sale Clauses.
(12:59 – 14:00) Eminent Domain and Condemnation: Lender’s Priority
(14:00 – 14:41) Trustee Substitution and Ensuring Foreclosure Can Proceed
(14:41 – 15:02) Heirs, Assigns, and Successors: Ensuring Loan Enforceability
Who This Episode is For
- Private lenders and real estate investors securing loans on properties
- New lenders wanting to avoid costly mistakes
- Attorneys and real estate professionals advising clients on secured transactions
- Borrowers who want to understand lender protections
Why You Should Listen
If you’re lending money on real estate, understanding how to secure your loan properly and what happens if a borrower defaults is essential to protecting your investment. Rich walks through real-world examples and gives clear action steps to avoid losing money.
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