How deed of trust favors lender vs. mortgage

California uses deeds of trust to secure real estate loans.  In some other states mortgages are used instead of a deed of trust.  How does a deed of trust favor lenders when compared to a mortgage?

  1.  It doesn’t – it favors borrowers.
  2.  If the borrower should default under a deed of trust, the lender can order the trustee to sell the property without a court proceeding
  3.  If the borrower should default under a deed of trust, the lender can order the trustee to sell the property with a court proceeding
  4.  Under a deed of trust the title does not pass to a third party, such as a trustee under a deed of trust.

The answer is B – should default under a deed of trust, the lender can order the trustee to sell the property without a court proceeding.  This is an advantage simply because not requiring a court proceeding speeds things up.