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 Oklahoma, the primary instrument used to secure a loan for the purchase of real estate is a mortgage rather than a deed of trust. While some states use deeds of trust, which involve a third-party trustee holding the legal title to the property until the loan is repaid, Oklahoma typically uses a mortgage system where the legal title remains with the borrower and the lender holds a lien on the property as security for the loan. In the event of a default on the loan, Oklahoma allows for both judicial and nonjudicial foreclosure processes. However, nonjudicial foreclosure is less common and is typically only available if the mortgage contains a power of sale clause. This means that if a borrower defaults on a mortgage loan, the lender may need to go through the court system to foreclose on the property, which can be more time-consuming and expensive than the nonjudicial process available with deeds of trust in other states.