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Deeds of Trust

There are three basic documents in a sale of land: the contract for sale, the deed, and (if needed) a mortgage. A mortgage is a debt instrument which “secures” a debt; in Missouri, the mortgage is almost always in the from of a deed of trust. Essentially, the deed of trust is a type of deed which is in the nature of a mortgage and is a conveyance in trust for the purpose of securing a debt.

Let’s unwind that a bit. The mortgagor is the borrower/debtor in the transaction; the mortgagee is the lendor/creditor. With a deed of trust, the trustee is a third party which holds title to the land of the mortgagor for the benefit of the mortgagee (holding title and collecting money).

The trustee, like all trustees, has fiduciary duties (see: Fiduciary Duties of a Trustee). Specifically, in the context of a trustee in a deed of trust, the trustee must perform the duties conferred upon him/her by the actual deed and RSMo 443.320. The trustee must act for both parties — mortgagor and mortgagee. In so doing, the trustee must act with the “utmost good faith” and “strictest impartiality.”

In addition to these duties (which are the subject of much litigation), only an individual or a domestic corporation (one domiciled in Missouri) may serve as trustee. A foreign corporation may only serve if serving as a co-trustee with a domestic Missouri corporation or an individual who is domiciled in Missouri.

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