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What is a fractional interest in a Trust Deed?

An investment in a single trust deed can be divided among several owners. For instance, a $400,000 note might have three buyers, one investing $200,000 and two other individuals investing $100,000 each. The loan servicer would then divide the monthly payments with 50% going to one investor and 25% going to each of the smaller investors. This can be a good way to invest in a quality loan even if you don’t have the available funds to purchase the entire loan. Generally, the somewhat larger loan amounts lend themselves to being fractionalized.