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About Private Mortgages and Deeds of Trusts

Definition of Deed of Trust

In some states, the document used in place of a mortgage. A type of security instrument conveying title in trust to a third party covering a particular piece of property. It is used to secure the payment of a note. A conveyance of the title to land to a trustee as collateral security for the payment of a debt with the condition that the trustee will reconvey the title on payment of the debt, and with power of the trustee to sell the property and pay the debt in the event of a default on the part of the debtor.

It’s just like the mortgage and Deed of Trust you have on your home except now you’re the lender!

Private mortgages enable you to take back the profits from the banks and put them in your pocket. Instead of the bank paying you a fraction of what they lend the money for, you are now the lender of a real estate mortgage secured with a Deed of Trust.

We have the borrower go to a Title Company

and sign a mortgage note and Deed of Trust

(along with several other documents). The Title

Company receives the money from the lender

(you), pays off current liens and sends the

deed to the county to be recorded. Once

recorded, you have a loan secured by a piece of real estate.

These are not your typical bank or mortgage company loans. These are short-term and lower loan-to-value loans. We have all seen what happens when banks make those high loan-to-value loans and things go wrong. They have large losses. We focus on the value of the property and look for Deeds of Trust no greater than 70% loan-to-value.

We use criteria similar to the tried-and-true formulas of the banking world but shift the primary decision criteria to the value of the collateral or security provided rather than the assessment of the borrower. Banks and insurance and mortgage companies focus on the ability of the borrower to repay. We look at the property’s marketability and the exit strategy of our borrowers. If these criteria make sense to the lender, we will loan the money. Not every note is right for each lender. You choose the loan you are comfortable with.

*****We are not financial advisors and do not or will not give financial advice. This is for information purposes only. Please speak with your trusted advisor before funding a private mortgage note. These notes are not insured by any private or government agency. These notes have limited to no secondary market (you will not be able to sell them and must be able to keep them to maturity). This is not a pool of mortgages, and you will be purchasing an individual note and Deed of Trust. You choose what you fund and how to manage it.******