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 Oregon, a deed of trust is commonly used in real estate transactions as a method of securing a loan. It involves three parties: the borrower (trustor), the lender (beneficiary), and the trustee, who is typically a title company. The borrower transfers the property title to the trustee, who holds it as security for the loan provided by the lender. The legal framework for deeds of trust in Oregon is outlined in the Oregon Revised Statutes (ORS), particularly in ORS Chapter 86. When the borrower repays the loan in full, the trustee reconveys the title to the borrower. However, 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 governed by specific statutes and is designed to be quicker and less costly than judicial foreclosure. It's important for borrowers to understand the terms of the deed of trust and the implications of default, as the nonjudicial foreclosure process can lead to the loss of their property without a court hearing.