Bond Indenture

Legal document used in some states in lieu of a Mortgage. Title to the property passes from seller to a trustee, who holds the mortgaged property until the mortgage has been fully paid. The trustee is authorized to sell the property if the borrower defaults, paying the lender the amount of the mortgage loan and any remaining balance to the former owner.

An instrument used in many states in lieu of a Mortgage. Legal title to the property is Vested in one or more Trustees to secure the repayment of the loan.
Example: Abel borrows $50,000 on his property in Texas from the Good Money Savings Association. He gives a deed of trust that is held in the name of I.M. Honest, a trustee. If Abel Defaults it will not be difficult for Good Money to gain possession.

Agreement between a bond issuer and holder covering the terms of issue; also called deed of trust. The bond terms include such conditions as dollar amount of issue; Pledged Assets; Covenants (e.g., working capital requirement); events of default; and call privileges. It also provides for the appointment of a trustee. See also Indenture.