What is the difference between a mortgage and a deed of trust?

Both mortgages and deeds of trust serve the same function — creating a security interest in real estate to secure a loan — but differ in structure and foreclosure process. Mortgage: two parties — borrower (mortgagor) gives a security interest to the lender (mortgagee). On default, lender must use judicial foreclosure (court process) to take the property. Judicial foreclosure can take 6-24 months and is expensive. Some states have non-judicial foreclosure available for mortgages. Common in: New York, Florida, New Jersey, Illinois, and other 'mortgage states.' Deed of Trust: three parties — borrower grants the property in trust to a trustee (neutral third party, often title company), to be held for the benefit of the lender (beneficiary). On default, the trustee can foreclose non-judicially (typically through notice and sale procedure) — faster (often 90-180 days), less expensive, no court involvement. Common in: California, Texas, Virginia, Arizona, and other 'deed of trust states.' Functionally similar for borrowers: same loan terms, same payments, similar recordation. Differences become important during default and foreclosure. Some states use both. Knowing which instrument applies in the state of transaction is essential for advising clients on consequences of default.