Overview
A Deed of Reconveyance is a legal document used in the context of real estate to indicate that the borrower has successfully paid off their mortgage, thereby allowing the title of the property to clear any claims by the lender. This document is crucial in affirming that the borrower’s financial obligations under the mortgage have been fully satisfied and that the lender no longer holds any claim or interest in the property.
Key Points
- The Deed of Reconveyance is issued by the mortgage holder (lender) after the loan is fully repaid.
- It effectively nullifies the deed of trust or mortgage, transferring the property title back to the borrower.
- This document is typically recorded with the county recorder’s office to update the public record and clear the lien from the property’s title.
Examples
Example 1:** Home Mortgage Payoff**
John has faithfully paid his mortgage for 30 years. Upon making his final payment, his lender issues a Deed of Reconveyance, which is then recorded at the county office. This document confirms that John now owns his home free and clear of any mortgage.
Example 2:** Refinancing**
When Jane decides to refinance her mortgage, her original lender will issue a Deed of Reconveyance stating that the lien from the original mortgage has been paid off. A new mortgage with different terms will replace the old one.
Frequently Asked Questions
What is the difference between a Deed of Reconveyance and a Release of Mortgage?
A Deed of Reconveyance is used in conjunction with a deed of trust, while a Release of Mortgage is used with a traditional mortgage. Both documents serve to clear the property’s title from a lien once a loan is repaid.
Do I need to do anything after receiving a Deed of Reconveyance?
Yes, it’s essential to ensure the deed is recorded with the county recorder’s office to update the public records and confirm that the lien has been cleared from the property.
Who is responsible for issuing the Deed of Reconveyance?
The lender or the trustee named in the deed of trust is responsible for preparing and issuing the Deed of Reconveyance once the mortgage debt has been paid in full.
Related Terms
Deed of Trust
A deed of trust involves three parties: the borrower, the lender, and a trustee who holds the title until the loan is paid off.
Release of Mortgage
A legal document provided by the lender saying that the borrower has paid off the mortgage in full, releasing the lender’s claims on the property.
Title Insurance
Insurance that protects property owners and lenders against any property title defects or undiscovered claims against the property.
Lien
A legal right or interest that a lender has in the borrower’s property, granted until the debt obligation is satisfied.
Online Resources
- U.S. Department of Housing and Urban Development (HUD): Offers information about mortgages, loans, and deeds.
- Consumer Financial Protection Bureau (CFPB): Provides resources and guides on mortgage satisfaction and related processes.
- American Bar Association (ABA): Provides legal resources related to real estate and property law.
References
- U.S. Department of Housing and Urban Development, “Deed of Trust vs. Mortgage.”
- Consumer Financial Protection Bureau, “Understanding Your Mortgage Documents.”
Suggested Books for Further Study
- “Mortgage Management for Dummies” by Eric Tyson and Ray Brown. A practical guide to managing mortgage and understanding related legal documents.
- “Real Estate Law” by Marianne M. Jennings. A comprehensive book on real estate laws, including deeds and title issues.
- “The Book on Managing Rental Properties” by Brandon Turner. Insights into property management, including dealing with legal documents.
