
California Real Estate License Area 4 (Financing) Flashcards
What is the difference between a ‘mortgage’ and a ‘deed of trust’ in California?
California primarily uses deeds of trust rather than mortgages for real property loans. A deed of trust involves three parties (borrower/trustor, lender/beneficiary, and neutral trustee) and allows non-judicial foreclosure, while a mortgage has two parties and requires judicial foreclosure. Under Cal. Civil Code § 2924, deeds of trust are the preferred security instrument because of faster, less expensive foreclosure procedures.