Security Deed

In most residential real estate closings, a borrowing entity will execute a promissory note (or notes) agreeing to pay the lender a specific amount of money over a given period of time according to the terms and conditions of said note/s. In order to protect its interests, the lender, depending on the state in which the property is located, will require the borrowing entity to execute a mortgage, security deed or similar document.

A mortgage is an interest in real estate created by a written document providing security to a lender for the performance under the terms of the note/s. The legal title to the property remains with the borrowing entity, while the lender has an interest in the real estate to the extent of the amount of the note/s.

A Security Deed, or Deed to Secure Debt, (security instrument of choice, in Georgia), is similar to a mortgage but transfers legal title to the lender for the term of the note/s.

In the event of default, by a borrowing entity, a security deed provides the lender the opportunity to foreclose or seize the residential property without having to take the borrowing entity to court. The mortgage also allows foreclosure but requires that the lender use a judicial foreclosure process to convert its interest in the real estate into legal title.

In Georgia, borrowing entities execute a security deed. However, in New York, for example, borrowing entities execute a mortgage. While both a mortgage and security deed require the lender to provide notice to the borrowing entity in the event of default, the foreclosure process is usually quicker through a security deed.

 
Call Us Today! Toll Free 866-752-4445

Don’t want to pick up the phone?