Which statement accurately describes foreclosure differences between a mortgage and a deed of trust?

• A. A mortgage creates a lien on the property.
• B. A deed of trust requires judicial foreclosure in all states.
• C. A deed of trust uses a trustee to allow non-judicial foreclosure in many states.
• D. It eliminates the mortgage lien.

Answer: (C)

Foreclosure methods depend on how the loan is secured. With a mortgage, the lender holds a lien and, in many states, foreclosure is a judicial process that goes through the courts, which means filings, court orders, and a court-led sale. A deed of trust changes the setup by placing the property in trust with a trustee who acts for the beneficiary. If the borrower defaults, the trustee can conduct a non-judicial foreclosure—often called a trustee’s sale—without court action in many states, making the process quicker and less costly. The lien on the property isn’t automatically eliminated by default; it’s typically extinguished only when the sale satisfies the debt. So the statement about a deed of trust enabling non-judicial foreclosures through a trustee in many states is the accurate description. The other points either don’t describe the foreclosure process accurately, claim judicial foreclosure is required in all states, or misstate what happens to the lien.