In a trust deed state a home loan is secured against a property by a "deed of trust". This document essentially grants the property to a 3rd party "trustee" to hold until you finish making your payments at which time the trustee "reconveys" the property back to you. If you fail to make payments to the party, or "lender", who loaned you the money, then the trustee has the power to sell the property such that the lender can recover the money they loaned. As such foreclosures are often referred to as trustee sales in trust deed states. Note that while the trustee is hired by the lender they have an equal fiduciary responsibility to both the homeowner and the lender to follow the terms of the deed of trust and the applicable state laws.

Some states do not use deeds of trust, and instead use mortgages which require the lender to sue the homeowner in a court of law in order to foreclose. Despite this many call deeds of trust "mortgages", when in fact they are not.