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The real estate note industry is a booming business with mortgage note and trust deed buyers buying thousands of real estate notes every day. Despite the growing number of note buyers entering the market, they cannot keep pace with the number of new real estate notes that are created each year. It is estitamted that ther are over $2.8 billion in residential notes and $5 billion in commercial and land notes that are created each year in the United States. At present there are approximately $91 billion mortgage notes and trust deeds waiting to be traded. Seller-financed real estate notes are created when the seller agrees to carry back part or all of the purchase price in the form of a note rather than cash. The seller will usually agree to this in order to receive the asking price for the property. Most people would rather have the cash instead and don't realize that they can sell those notes. Whether the real estate note is a mortgage note or trust deed the instruments are basically the same. The difference between them lies in the manner in which the property is secured. A mortgage note secures the property through a legal claim against it known as a lien. The lien is registered with the county recorder and stays on property until the borrower has repaid the loan. The borrower usually retains title to the property. When a trust deed is used to secure property, the title is transferred not to the borrower but to a trustee. The trustee holds title until the debt is repaid or forecloses on the property if the borrower defaults on the loan. In either case the role of real estate notes is the same, to secure the loan with the property. Below is a table that list the main security instrument and the dominant foreclosure method given for each state. |
| State | Instrument | Foreclosure Method |
|---|---|---|
| Alabama | Mortgage | Power of Sale |
| Alaska | Trust Deed | Power of Sale |
| Arizona | Mortgage | Judicial |
| Arkansas | Trust Deed | Power of Sale |
| California | Trust Deed | Power of Sale |
| Colorado | Trust Deed | Power of Sale |
| Conneticut | Mortgage | Strick Foreclosure |
| Delaware | Mortgage | Judicial |
| Colorado | Mortgage | Judicial |
| District of Columbia | Trust Deed | Power of Sale |
| Florida | Mortgage | Judicial |
| Georgia | Security Deed | Power of Sale |
| Hawaii | Trust Deed | Power of Sale |
| Idaho | Trust Deed | Power of Sale |
| Illinois | Mortgage | Judicial |
| Indiana | Mortgage | Judicial |
| Iowa | Mortgage | Judicial |
| Kansas | Mortgage | Judicial |
| Kentucky | Mortgage | Judicial |
| Louisiana | Mortgage | Judicial |
| Maine | Mortgage | Entry and Possession |
| Maryland | Mortgage | Power of Sale |
| Massachusetts | Mortgage | Power of Sale |
| Michigan | Mortgage | Power of Sale |
| Minnesota | Mortgage | Power of Sale |
| Missiissippi | Trust Deed | Power of Sale |
| Missouri | Trust Deed | Power of Sale |
| Montana | Mortgage | Judicial |
| Nebraska | Mortgage | Judicial |
| Nevada | Mortgage | Power of Sale |
| New Hampshire | Mortgage | Power of Sale |
| New Jersey | Mortgage | Judicial |
| New Mexico | Mortgage | Judicial |
| New York | Mortgage | Judicial |
| North Carolina | Trust Deed | Power of Sale |
| North Dakota | Mortgage | Judicial |
| Ohio | Mortgage | Judicial |
| Oklahoma | Mortgage | Judicial |
| Oregon | Trust Deed | Power of Sale |
| Pennsylvania | Mortgage | Judicial |
| Rhode Island | Mortgage | Power of Sale |
| South Carolina | Mortgage | Judicial |
| South Dakota | Mortgage | Power of Sale |
| Tennessee | Trust Deed | Power of Sale |
| Texas | Trust Deed | Power of Sale |
| Utah | Mortgage | Judicial |
| Vermont | Mortgage | Vermont |
| Virginia | Trust Deed | Power of Sale |
| Washington | Mortgage | Judicial |
| West Virginia | Trust Deed | Power of Sale |
| Wisconsin | Mortgage | Power of Sale |
| Wyomin | Mortgage | Power of Sale |