A mortgage deed is the document that creates a mortgage and grants an ownership interest (lien) to the lender (often a bank) until the loan is paid in full. A mortgage deed usually must include:
• the name of the mortgagor (the borrower);
• words of grant or conveyance in which the mortgagor (borrower) grants or conveys real property to the lender or mortgagee;
• the name of the mortgagee;
• a property description sufficient to identify the mortgaged real property;
• the mortgagor’s signature; and
• an acknowledgment in which a notary public signs and officially stamps the mortgage deed to verify the identity of the person signing the deed and for the mortgagor to declare or acknowledge to the notary that the mortgagor signed the deed willingly and voluntarily and was not coerced into signing it.
And in some states a deed must be delivered to be effective. Delivery of a deed generally includes:
• the grantor’s (mortgagor or borrower) intent to convey title to the property to the grantee (mortgagee or lender)—not just the physical handing over of the deed; and
• the grantee’s (mortgagee or lender) acceptance of the deed as an immediate conveyance of the title to the real property.
Laws vary from state to state and the legal requirements for a valid mortgage deed may be located in a state's court opinions (common law or case law) or in its statutes.
In Texas, a mortgage deed, also known as a deed of trust, is the document that secures a loan by using real property as collateral. Texas law requires that a mortgage deed include the name of the borrower (mortgagor), the lender (mortgagee), a legal description of the property sufficient to identify it, the borrower's signature, and an acknowledgment by a notary public. The notary's acknowledgment serves to confirm the identity of the person signing the deed and that the signature was made willingly and without coercion. Additionally, for a mortgage deed to be effective in Texas, there must be a delivery, which implies the borrower's intent to convey the property title to the lender and the lender's acceptance of the deed. These requirements are governed by Texas Property Code and relevant case law. It's important to ensure that all legal formalities are observed to create a valid mortgage lien on the property in question.
