Deed To Secure Debt | Propertylogy

Deed To Secure Debt

By on September 1, 2019

A debt to secure debt is a type of mortgage that is used in some states whereby the property title is transferred to the lender in order secure the loan until it is paid off in full.

This is one of the concepts of modern mortgage theory.

Many homeowners and buyers find such practices highly controversial as they would not be the legal owners of the house under such arrangements.

This basically means that the “homeowners” would never truly own the property if they continue to refinance the loan, get a home equity loan, extend the term, etc.

Yet without a deed-to-secure arrangement, lenders in some state might not agree to lend.

The main reason why lenders deal with deed to secure debt is for risk management purposes.

With control over the deed, foreclosure proceedings can be more straight forward to enforce with minimum delays.

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