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  • Documentary Transfer Tax
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Deed of Trust and Promissory Note

Templates and forms.

A deed of trust, also called a trust deed, is the functional equivalent of a mortgage. It does not transfer the ownership of real property, as the typical deed does. Like a mortgage, a trust deed makes a piece of real property security (collateral) for a loan. If the loan is not repaid on time, the lender can foreclose on and sell the property and use the proceeds to pay off the loan.

Deed of trust is not used for transferring property to a trust A trust deed is not used to transfer property to a living trust (use a Grant Deed for that). Other than the terminology, trust deeds and living trusts have nothing in common. A living trust is used to avoid probate, not to provide security for a loan. Visit our page on Estate Planning for more information on that topic.

A trust deed is always used together with a promissory note (also called “prom note”) that sets out the amount and terms of the loan. The property owner signs the note, which is a written promise to repay the borrowed money.

A trust deed gives the third-party “trustee” (usually a title company or real estate broker) legal ownership of the property. This means that the trustee has no control over the property as long as the borrower (aka property owner or “trustor”) makes the agreed-upon loan payments and keeps the other promises in the trust deed. If the borrower defaults, however, the trustee has the power to sell the property to pay off the loan without having to file an action in court. The lender (also known as “beneficiary”) is then repaid from the proceeds.

Step-by-Step Instructions

Determine the parties to the agreement.

There will be three parties to these agreements. Identifying these parties ahead of time will make it easier to complete the forms.

Beneficiary

The beneficiary, more commonly known as the lender, is the person or company that lends the borrower money, and who will be entitled to be repaid from the proceeds of a foreclosure. If the lender is a corporation, be sure to include language such as “Lender is a corporation organized and existing under the laws of California” in your documents.

Borrower(s)

If there are two or more borrowers, they will be borrowing the money “jointly and severally.” This means each debtor is responsible (liable) for the entire amount of the debt. A creditor may collect from whichever debtor has the “deep pocket” (lots of money); the debtor who pays may demand contributions from the other debtors. Joint borrowers will want to carefully consider whether or not they wish to be jointly responsible with their co-borrower.

When the property used as security for the loan is owned by more than one person, you may want to consider who you will name as borrowers and owners of the property on the deed of trust. The names of  all  owners of the property, and their spouses, must be included to give the entire property (all owners’ interests in the property) as security. A co-owner can only give as security his or her interest in the property. In other words, a lender wants to be sure that all owners and their spouses sign the deed of trust as a condition of lending the money (unless the lender is willing to take as security one co-owner’s interest in property).

When a bank or savings and loan finances the purchase of real estate, the trustee is almost always a title or trust company. Sometimes real estate brokers act as trustees. Attorneys commonly write in the name of a title company as trustee on a trust deed, without consulting the title company. Title companies even give out trust deed forms with their names already printed in the “trustee” space. They don’t mind being named as trustee because a trustee has nothing to do unless the borrower defaults. If that happens, most title or escrow companies turn the deed over to a professional foreclosure firm.

Prepare the Deed of Trust and Promissory Note

The Deed of Trust and Promissory Note must be in a format that the Sacramento County Clerk/Recorder’s Office will accept. Customizable templates may be downloaded from these links:

  • Promissory Note
  • Deed of Trust

Sample filled-in forms with instructions are available at the end of this Guide.

Get the Signatures Notarized

Notarization is required before recording these documents with the County Recorder. The notary’s acknowledgment of the trustor’s signature is formal proof that the signature is genuine. You can find a notary at your bank, a mailing service, or in the Yellow Pages. with instructions are available at the end of this Guide.

Record the Signed Documents at the County Recorder’s Office

Take the original signed and notarized Deed of Trust and Promissory Note to the County Recorder’s Office for the county where the property is located. In Sacramento, this is at 3636 American River Drive, Ste. 110, Sacramento CA 95864. You will need to pay a fee (you can check the current recording fees in Sacramento ). The clerk in the recorder’s office will take your original documents and stamp them with the date, time, a filing number, and book and page numbers. The original documents will be mailed back to you. Note: trust deeds are exempt from the documentary transfer tax.  California Revenue and Taxation Code § 11921 .

What Happens Next?

If the borrower pays off the loan without defaulting (as happens in most cases), the beneficiary (lender) will request the trustee execute and record a deed reconveying the property to the borrower. You can find a  Deed of Full Reconveyance  on the Find A Form page of our website.

For more Information

At the law library:.

Deeds for California Real Estate KFC 170 .R36 (Self Help)

The Deed of Trust must be in a format the Sacramento County Recorder’s Office will accept. See the sample templates of the Deed of Trust and the Promissory Note below.

Deed of Trust and Assignment of Rents (page 1)

This material is intended as general information only. Your case may have factors requiring different procedures or forms. The information and instructions are provided for use in the Sacramento County Superior Court. Please keep in mind that each court may have different requirements. If you need further assistance consult a lawyer.

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A Deed of Trust can be Assigned Apart from the Note, and that often occurs just before a foreclosure. But What Does That Mean? Not Much, the Deed of Trust is Inseparable from the Note

Notes and Deeds of Trust are often assigned to different parties. The question posed is what happens if the Deed of Trust alone is assigned ? A typical assignment of the Deed of Trust alone will purport to assign “all beneficial interest under that certain Deed of Trust dated xyz..” But the long-established law in California is clear: the beneficial interest under a Deed of Trust is held by the party who holds the Note (or is entitled to enforce it), without regard to the assignment of the Deed of Trust .

Sacramento-Deed-of-Trust-Lawyer

The subject was again addressed by the California Courts in Domarad v. Fisher & Burke, Inc. (1969) 270 Cal. App. 2d 543 ). The Court noted that a deed of trust is a mere incident of the debt it secures and that an assignment of the debt carries with it the security. “The deed of trust is inseparable from the debt and always abides with the debt, and it has no market or ascertainable value, apart from the obligation it secures and that a deed of trust has no assignable quality independent of the debt, it may not be assigned or transferred apart from the debt, and an attempt to assign the deed of trust without a transfer of the debt is without effect. (emph. added)”

Sacramento-Deed-of-Trust-assignment-attorney

In Stockwell v. Barnum ((1908) 7 Cal. App. 413) the Court stated that this Code “is wholly foreign to deeds of trust, which, instead of creating a lien only, as in the case of a mortgage, passes the legal title to the trustee, thus enabling him in executing the trust to transfer to the purchaser a marketable record title. It is immaterial who holds the note. The transferee of a negotiable promissory note, payment of which is secured by a deed of trust whereby the title to the property and power of sale in case of default is vested in a third party as trustee, is not an incumbrancer to whom power of sale is given…” Stockwell @ 417.

And more recently “it has been established since 1908 that this statutory requirement that an assignment of the beneficial interest in a debt secured by real property must be recorded in order for the assignee to exercise the power of sale applies only to a mortgage and not to a deed of trust.” ( Calvo v. HSBC Bank USA, N.A. (2011) 199 Cal.App.4th 118 , 122.)

Why is that? There is a technical difference between the two security instruments. The mortgage only involves two parties –the borrower who grants the power of sale to the lender, and the lender who then holds the beneficial interest in the mortgage plus the power of sale. A deed of trust, on the other hand, involves three parties: the borrower, the lender, and the trustee who is granted conditional title to the encumbered property as well as the power of sale.

Sacramento-Deed-of-Trust-attorney

Thus, the deed of trust may thus be assigned one or multiple times over the life of the loan it secures. But if the borrower defaults on the loan, only the current beneficiary may direct the trustee to undertake the nonjudicial foreclosure process. “[O]nly the ‘true owner’ or ‘beneficial holder’ of a Deed of Trust can bring to completion a nonjudicial foreclosure under California law.” Yvanova v. New Century Mortgage (62 Cal. 4th 919) (2016)

An Alternative The Commercial Code also provides a mechanism for recording an assignment of the security if there has been an off-record transfer of the note but no recorded assignment of the deed of trust or mortgage. The buyer of the note can record a copy of the transfer agreement whereby the note was acquired, together with a sworn statement that a default has occurred, and in that event may proceed with a nonjudicial foreclosure. ( Cal. Com. Code, § 9607, subd. (b))

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IMAGES

  1. Free California Deed of Trust Form

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  2. California Deed Trust Form

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  3. Chula Vista California Short Form Deed of Trust and Assignment of Rents

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  4. Free California Deed of Trust Form

    ca assignment of deed of trust form

  5. Assignment Of Deed Of Trust Form

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  6. 2021 Assignment Of Deed Of Trust Form Fillable Printable Pdf Forms Images

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COMMENTS

  1. PDF This Space for Recorder'S Use Assignment of Deed of Trust

    FOR VALUE RECEIVED, the undersigned hereby grants, assigns and transfers to. all beneficial interest under that certain Deed of Trust dated executed by. to and recorded as Instrument No. Recorder's office of. on. , as Trustor , Trustee , of Official Records in the County County, California. Describing land therein as (insert legal description):

  2. PDF Deed of Trust Short Form

    SHORT FORM DEED OF TRUST AND ASSIGNMENT OF RENTS. ORDER NO. The following is a copy of provisions (1) to (14), inclusive, of the fictitious deed of trust, recorded in each county in California, as stated in the foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein.

  3. PDF Assignment of Deed of Trust

    ASSIGNMENT OF DEED OF TRUST. FOR VALUABLE CONSIDERATION, the undersigned hereby grants, assign, and transfers to all beneficial interest under that certain Deed of Trust dated by to as Trustee, and recorded , in Book/Reel , at Page/Image , Series Number of Official Records of County, California, together with the Promissory Note secured by said ...

  4. PDF ASSIGNMENT OF DEED OF TRUST

    ASSIGNMENT OF DEED OF TRUST. FOR VALUE RECEIVED, the undersigned assigns, and transfers to Deed of Trust dated executed by. hereby grants, all beneficial interest under that certain , Trustor, to , Trustee, and recorded as instrument no. official records in the County Recorder's Office of. of California, describing land therein as:

  5. California Assignment of Deed of Trust Forms

    The current Lender/Beneficiary uses this form to assign a Deed of Trust to another lender. This is often done when a Deed of Trust has been sold. This allows the new Lender the right to collect payments of the debt. A typical Deed of Trust contains a Power of Sale clause, allowing a non-judicial foreclosure. (The power of sale may be exercised ...

  6. PDF Short Form Deed of Trust and Assignment of Rents This Deed of Trust

    TS-134 LOS ANGELES, CA 90012. (SPACE ABOVE THIS LINE FOR RECORDER'S USE) SHORT FORM DEED OF TRUST AND ASSIGNMENT OF RENTS. INCORPORATING BY REFERENCE CERTAIN PROVISIONS OF A FICTITIOUS DEED OF TRUST OF RECORD. THIS DEED OF TRUST, Made this day of , , between , herein called TRUSTOR, whose address is ; herein called TRUSTEE; and Clerk, U.S ...

  7. PDF Short Form Deed of Trust and Assignment of Rents

    Performance of each agreement of Trustor incorporated by reference or contained herein. 2. Payment of the indebtedness evidenced by one promissory note of even date herewith, and any extension or renewal thereof, in the principal sum of executed by Trustor in favor of Beneficiary by order. 3.

  8. PDF ASSIGNMENT OF DEED OF TRUST

    ASSIGNMENT OF DEED OF TRUST. See Exhibit A attached hereto and made a part hereof. TOGETHER with the note or notes therein described or referred to, the money due and to become due thereon with interest, and all rights accrued or to accrue under said Deed of Trust. A notary public or other officer completing this certificate verifies only the ...

  9. Deed of Trust and Promissory Note

    Take the original signed and notarized Deed of Trust and Promissory Note to the County Recorder's Office for the county where the property is located. In Sacramento, this is at 3636 American River Drive, Ste. 110, Sacramento CA 95864. You will need to pay a fee (you can check the current recording fees in Sacramento ).

  10. California Deed of Trust

    This assignment document is used in California to facilitate the transfer of a debt obligation from the original lender to a new lender, or from one party to another. In California, there are two main types of Deed of Trust — Assignment: 1. Assignment of Deed of Trust: This type of assignment is used when a lender decides to transfer or sell ...

  11. Free California Deed of Trust Form

    Updated July 17, 2023. A California deed of trust is a deed used in connection with a mortgage loan. It is the deed that shows that the lender has an interest in the property while the landowner is paying the mortgage. A short form deed of trust for use in typically smaller and non-institutional loans secured by any type of real property (commercial and residential) located in California.

  12. PDF ASSIGNMENT OF DEED OF TRUST

    Recorder's office of _____, County, California, as described in said deed of trust, together with the note or notes therein described or referred to, the money due and to become due thereon with interest, and all rights accrued or to accrue under said Deed of Trust.

  13. PDF California Deed of Trust Form

    The instrument will contain the name of the original Lender, Trustee, and Borrower, the book and page where this Deed is recorded, and the name and address of the successor Trustee. Without conveyance of the Property, the successor Trustee will succeed to all the title, powers, and duties of the Trustee. 24.

  14. A Deed of Trust can be Assigned Apart from the Note, and that often

    But the long-established law in California is clear: the beneficial interest under a Deed of Trust is held by the party who holds the Note (or is entitled to enforce it), without regard to the assignment of the Deed of Trust. We start with the U.S. Supreme Court decision in Carpenter v. Longan (83 US 271.)

  15. California Assignment of Deed of Trust

    In California, there are a few different types of Assignment of Deed of Trust, classified based on the purpose and circumstances of the transfer. Some common types include: 1. Standard Assignment of Deed of Trust: This type of assignment is used to transfer the loan to a new lender, often when there is a refinancing or change in loan service. 2.

  16. Sacramento County Assignment of Deed of Trust Forms

    Assignment of Deed of Trust Form. Fill in the blank form formatted to comply with all recording and content requirements. Included document last reviewed/updated 3/28/2024.

  17. DOC Assignment of Deed of Trust

    SPACE ABOVE THIS LINE FOR RECORDER'S USE. ASSIGNMENT OF DEED OF TRUST. FOR VALUE RECEIVED, the undersigned hereby grants, assigns and transfers to. all beneficial interest under that certain Deed of Trust dated. executed by. Trustor, to. Trustee. and recorded as Instrument No. , on.

  18. California Blank Documents

    Deed of Trust - Assignment of Rents / Due on Sale. (for use with Note containing Due on Sale provision) MS Word. PDF. Request for Copy of Notice of Default. MS Word. PDF. Request for Notice of Delinquency. MS Word.

  19. PDF Long Form Deed of Trust and Assignment of Rents

    All sums secured by said Deed of Trust have been fully paid and satisfied; and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel all evidences of indebtedness, secured by said Deed of Trust, delivered to you herewith together with said Deed of Trust, and to ...

  20. PDF California Short Form Deed of Trust

    The following is a copy of provisions (1) to (14), inclusive, of the fictitious deed of trust, recorded in each county in California, as stated in the foregoing Short Form Deed of Trust and Assignment of Rents and incorporated by reference in this instrument as being a part thereof as if set forth at length therein. To Protect the Security of ...

  21. PDF All-inclusive Deed of Trust With Assignment of Rents (Long Form)

    as Beneficiary herein. In this All-Inclusive Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 9) That Trustee accepts this Trust when this All-Inclusive Deed of Trust, duly executed and acknowledged, is made a public record as provided by law.

  22. Ventura County Assignment of Deed of Trust Forms (California)

    The current Lender/Beneficiary uses this form to assign a Deed of Trust to another lender. This is often done when a Deed of Trust has been sold. This allows the new Lender the right to collect payments of the debt. A typical Deed of Trust contains a Power of Sale clause, allowing a non-judicial foreclosure.