A New York deed of trust is a loan security agreement wherein a trustee retains a property title for a lender until a debt has been satisfied by a borrower. Like a mortgage, a deed of trust gives the lender collateral for a real estate loan. The borrower risks having their property foreclosed on if they fail to make payments or otherwise default on the loan contract. Unlike a mortgage, a deed of trust involves a third-party trustee who is responsible for holding the property’s legal title throughout the loan term and handling the foreclosure process.
From 1998 to 2009, the state of New York permitted non-judicial (out-of-court) foreclosures on certain types of real estate through a power of sale clause in the deed of trust (or mortgage). However, any security instrument executed after July 1, 2009 can no longer include this language and the property in question must be foreclosed on judicially.
- Statutes: § 320
- Formatting: The deed of trust should be formatted to the local standards set by the County Clerk or City Register.
- Signing Requirements (§ 306): Notary Public
- Where to Record (§ 291): County Clerk or City Register (Outside NYC – Inside NYC)
- Recording Fees: Fees vary; filers can expect to pay around $40-$50.
Related Forms (1)
New York Promissory Note – Records a borrower’s promise to satisfy a debt owed to a lender.