A deed of trust is a legal document that transfers ownership of real property (real estate) to a trustee until the person or entity buying the real property repays a loan for the purchase of the real property. A deed of trust is similar to a mortgage—some states use a mortgage and other states use a deed of trust.

In a deed of trust transaction a lender (the bank) gives a borrower (who is purchasing the real property) money to pay the seller, and the borrower gives the lender one or more promissory notes for repayment of the loan. As security for the promissory notes, the borrower transfers the ownership interest (title) in the real property to a trustee—often a title company—to hold until the borrower repays the lender.

If the borrower fails to timely make payments and defaults on the loan, the property generally may be sold without the lender using or going through the court system. This is known as nonjudicial foreclosure and is usually less time-consuming and less expensive for the lender.

A deed of trust is also known as a trust deed, a trust indenture, an indemnity mortgage, or a common-law mortgage.

In Hawaii, real estate transactions can be secured with a mortgage or a deed of trust, although mortgages are more commonly used. A deed of trust involves three parties: the borrower (trustor), the lender (beneficiary), and the trustee, who holds the title to the property in trust for the lender until the loan is paid off. If the borrower defaults on the loan, the trustee has the authority to sell the property through a nonjudicial foreclosure process, which does not require court intervention. This process is typically faster and less costly than a judicial foreclosure, which is required with a traditional mortgage if the lender wishes to foreclose without the borrower's consent. It's important to note that while deeds of trust provide a mechanism for nonjudicial foreclosure, the specific procedures and requirements for such foreclosures are governed by Hawaii state law, and borrowers are afforded certain protections under these regulations.