Deed of Trust Forms and Notes
What is a Deed of Trust?
A
deed of trust is similar to a
security agreement or a
mortgage on a home or other real property. This document legally defines the conditions of the
loan and the
agreement between the trustor (borrower), trustee (holds the legal title), and the beneficiary (the lender). If the borrower defaults on the loan, this document gives the trustee the right to sell the property and pay the lender with the proceeds.
What is a Promissory Note?
A promissory note is a legal document that puts the loan in writing and describes the amount and due date. It can also spell out interest payments and give the lender the right to reclaim any collateral such as goods or property, or seek other remedies if the borrower fails to pay the loan amount. When the lender and borrower sign a legal form, it makes the arrangement official. Promissory notes provide evidence of the debt if you end up going to court.
If you have made a decision to make a loan to someone, it is important to secure your loan with the borrower’s real property, using a Colorado Deed of Trust form to convey the property to the Public Trustee in trust, and a Promissory Note. But what comes next? After you complete the form you will need to have the deed of trust signed by all parties in front of a notary public. Second, make copies of the deed of trust and the promissory note for yourself (lender) and the borrower. Last, file the original Colorado Deed of Trust with the Public Trustee of the county where the property is located.
When the borrower has paid the loan back in full, you will need to file a Colorado release of deed of trust with the Public Trustee in the county where the property is located. The form is called “Request for Full/Partial Release of Deed of Trust & Release with Production of Evidence of Debt”. The evidence of debt would be the original promissory note marked “Paid”.
