Deed of Trust or Mortgage: State Comparison Chart

by Practical Law Real Estate

A Chart that provides a state-by-state comparison of the security instruments used in US real estate finance. This Chart details whether a mortgage, deed of trust, or security deed is the preferred instrument in each jurisdiction for securing debt on real property. It explains the critical differences between lien theory and title theory states, outlining how each legal framework impacts the creation and priority of security interests. In lien theory states, lenders are granted a lien, while in title theory states, they receive legal title to the collateral until the debt is satisfied. This resource serves as an essential quick-reference tool for legal professionals and lenders navigating the significant variations in state law governing commercial real estate transactions. Understanding these distinctions is crucial for properly structuring, perfecting, and enforcing real property loans across the United States. This resource is updated semi-annually to reflect the latest legal standards.