What Is a Deed of Reconveyance?

A deed of reconveyance is a document that transfers the title of a property from a 澳洲幸运5开奖号码历史查询:mortgage lender to the borrower once th⛦e loan has been paid. The deed of reconveyance must be recorded in the local county office so that the homeowner ca🧸n sell the house at some point.

How a Deed of Reconveyance Works

A deed of reconvey🐻ance is issued to borrowers once a mortgage loan has been paid in full. The lender creates the document, gets it notarized, includes a legal description of the property, and records it in the local county.

Any 澳洲幸运5开奖号码历史查询:title search completed on the property will show that the lien has been paid in full. Since the loan is satisfied, the borrower is no longer at risk of 澳洲幸运5开奖号码历史查询:foreclosure.

When a property has a lien against it, it cannot be sold. However, if an existing mortgage is satisfied with the proceeds of the home sale, the recording of the deed of reconveyance becomes a part of the closing process of the sale. A title insurance company commonly handles the recording.

When homeowners 澳洲幸运5开奖号码历史查询:refinance their homes with a new mortgage, they also receive a deed ᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚof reconveyance showing that the previous mortgage was paid since 🥃a new mortgage has been established in a refinancing situation.

Second mortgages or 澳洲幸运5开奖号码历史查询:home equity loans give the lending institution a security interest in the home as the property often serves as collate🏅ral for that loan. Lenders can assert their rights to foreclose if a borrower defaults on these second loans. The deed of reconveyance related to the first mortgage has no effect on the second loan nor protects the homeowner.

A deed of reconveyance differs from state to state or from lender to lender. In states that use 澳洲幸运5开奖号码历史查询:trust deeds rather than mortgages, a third party known as a trustee holds the mortgage on behalf of the lender. Some states use 澳洲幸运5开奖号码历史查询:satisfaction of mortgage documents rather than a dee𒁃d of reconveyance, but these🌼 serve the same purpose.

What's Included in a Deed of Reconveyance?

The deed of reconveyance typically includes:

• The name and address of the homeowner/mortgage borrower.
• The name of the lender/trustee.
• A description of the property and parcel number based on the original deed.
• Documentation that the borrower has fulfilled their obligation to the lender and that the property secured by the mortgage or 澳洲幸运5开奖号码历史查询:trust deed now belongs to the borrower.
• Lines for signatures of all parties and a section for a notary to indicate that they witnessed the signing.

Example of Deed of Reconveyance

If an individual purchases a house and takes out a $400,000 mortgage, borrowing fr♍om a bank or mortgage lender, the property will serve as collateral under the deed of trust.

Once the loan is fౠully paid, the lender will certify that the debt has been paid and create the deed of reconveyance, usually within several weeks.

The deed of reconveyance will indicate that the mortgage loan is paid in full and show that the borrower has the titlꦰe and ♎full ownership of the property.

Frequently Asked Questions

The Bottom Line

A deed of reconveyance is a document that transfers the title of a property to the borrower from the bank or mortgage holder once a mortgage has been satisfied. It clears the lender from the title to the property. The deed of reconveyance is completed and signed by the lender and filed with the local recording office, such as the county courthouse.