I would advise anyone considering engaging in this kind of transaction to engage with an attorney competent in local real estate laws.
The requirements to make a valid Deed of Trust that creates an enforceable lien are complex and vary from state to state (and even locally in some instances). If there are mistakes in the DOT, if it is not properly executed or recorded, then you may find out years from now if/when the borrower defaults that you have no way of recovering the collateral.
The use of crypto also somewhat complicates things as borrowers can claim they never received loan proceeds -- normally, this is easily resolved by proving a copy of the cancelled check payable to the borrower (or the borrowers benefit), along with relevant bank records. To my knowledge, there is not any precedent on how to successfully defend yourself against this kind of claim -- maybe funds could be transferred via an exchange.
This can be done as complicated or as easy as the lender wishes. A contract is drawn up between the parties explaining the process and in fact the trading can be done in person (or at an attorney or CPA or other 3rd party if so desired) so proof of the transaction is obtained simultaneous with the transfers. Once the BTC has changed hands a DOT is recorded at the County recorder. Again - this can be done in person and then verified with a title search or title insurance if the lender wishes. In most states a standard language DOT is actually a part of their state Code (for instance California uses standardized DOT language and just refers to it on the recorded DOT)