Deed Of Reconveyance
Candlefocus EditorFor example, whenever a mortgage holder or homeowner pays off the full amount of a loan, the lender usually issues a deed of reconveyance. The deed of reconveyance contains the contract that the title to the property will be returned to the owner of the property. This document should be recorded with the county's and/or recorder's office in order to make sure there is not a clouded title on the property. A clouded title could pose a problem if the homeowner chooses to sell the property, refinance it, or take out a home equity loan.
The deed of reconveyance must be filed with the local county or recorder's office before the owner can sell the property. A deed of reconveyance serves as the official proof that the lender no longer owns an interest in the property. The deed will also show that the lender has no further claim to the mortgage loan on the property and that the responsibility for paying off the mortgage loan shifts completely to the borrower.
When recording a deed of reconveyance, both the lender signing the deed of reconveyance and the homeowner should be present. The homeowner can present documentation to prove that the loan has been paid in full, and the lender can provide confirmation that the loan has been satisfied. Once all the documents have been reviewed and confirmed, the deed of reconveyance can then be filed with the local county or recorder's office.
A deed of reconveyance is an important legal document which cannot be ignored when a homeowner pays off a mortgage loan. As it serves as the official record that the loan has been paid off and that the property title is held by the borrower. If the deed of reconveyance is not properly recorded, the homeowner could face issues when attempting to sell their property, refinance it, or even obtain a home equity loan.