Security Deed

A security deed functions in a similar fashion as a mortgage. The security deed is an interest in real estate which gives legal title of property to the lender of the mortgage for the term of the mortgage note. Once the note is paid off by the borrower, there is a formal cancellation of the security deed based upon full payment. Sometimes, a security deed is referred to as a “trust deed” or a “deed to secure a debt.”

How a Security Deed Works

A security deed is a formal written legal document which is executed by the borrower and lender in a real estate transaction. In the event that the borrower of the money defaults on the mortgage amount, the security deed allows the lender to automatically foreclose or seize the property; the lender does not need to resort to formal court action to do so. The assignment of a security deed may or may not be done, depending upon the jurisdiction where the real estate transaction occurs, as well as the language of the security deed instrument, which may limit one’s ability to assign the deed.

Legal Issues with Security Deeds

When executing a security deed, a borrower must be careful to consider the potential of their defaulting on the mortgage. Failure to make timely payments may result in the immediate foreclosure or seizure of the property, so one must be cognizant of this consequence.

Getting Legal Help

If you are contemplating a real estate transaction which utilizes a security deed, it is important to consult with an experienced real estate attorney. An experienced attorney can not only advise you if the security deed will best serve your particular needs, but also the attorney can assist in ensuring that the entire real estate transaction best suits your interest.

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