What is a deed of reconveyance and how does it work?

Quick insights

• A deed of reconveyance signifies the complete repayment of your mortgage loan and the removal of any liens against the property.
• The process usually involves the borrower paying off the loan, requesting a reconveyance from the lender or trustee, signing the deed, getting it notarized and receiving a copy of the deed.
• The most common fees associated with obtaining a deed of reconveyance include a recording fee, notary fee, document preparation fee and service fee.

Think of the deed of reconveyance, commonly known as “the deed”, as the next step of your financial journey and the mortgage process. This crucial document wipes away any outstanding debts to ensure your title is clear. In this article, we will cover the nuances of this essential document, its intricacies and shed light on the journey from mortgage borrower to proud homeowner.

What is a deed of reconveyance?

A deed of reconveyance is a document that indicates you have fully paid off the mortgage on your home. This document represents the transfer of ownership from your loan provider to you. The process typically involves the mortgage provider releasing the lien placed on your property, indicating that you have successfully repaid your mortgage loan in full.

What is satisfaction of mortgage?

A satisfaction of mortgage is a document issued by the mortgage provider to the borrower once the loan has been paid off in full. It often serves as proof that the loan has been satisfied, and the borrower no longer owes money on the mortgage.

Both documents represent that a mortgage loan has been fully paid off, but the satisfaction of mortgage is used more universally in the world of loan servicing. A deed of reconveyance is usually specific to certain states, particularly in deed of trust states. A deed of trust is a type of real estate transaction that some states use instead of a mortgage. This document is used to transfer the legal title of a property from the trustee back to the borrower once the loan has been paid off entirely.

What is full reconveyance?

A full reconveyance, also known as a reconveyance of mortgage, is the complete release of a property from the mortgage or deed of trust. This process generally occurs once the borrower has fulfilled all financial obligations associated with the mortgage, resulting in the lender relinquishing any liens on the property. This document is proof that the borrower now fully owns their property free and clear.

How does the deed of reconveyance process work?

The typical process for the deed of reconveyance is as follows:

• Loan repayment: The borrower makes all of the required payments on the loan, paying off the debt entirely.
• Request for reconveyance: Once the mortgage loan is fully paid off, the borrower requests a reconveyance from the loan provider or the trustee.
• Verification of payment: The mortgage provider will verify that the loan has been paid off in full by conducting a title search or reviewing the loan documents.
• Preparation of deed: If everything checks out, the lender or trustee will prepare the deed of reconveyance to release the lien on the property.
• Signing and recording: Both the lender or trustee and the borrower will sign the deed of reconveyance. This is recorded with the appropriate county or municipal office where property records are securely kept.
• Review for errors: It's important for both parties to review the deed of reconveyance for any errors or discrepancies. If necessary, corrections will be made to ensure accuracy.
• Notarization: Once the document has been fully reviewed and checked for accuracy, the deed is notarized to validate the signatures of the parties involved.
• Notification: Once everything has been recorded, the borrower will typically receive a copy of the recorded deed of reconveyance to confirm that the mortgage loan has been fully satisfied.

Are there any fees associated with obtaining a deed of reconveyance?

The fees associated with obtaining a deed of reconveyance can vary. It depends on the jurisdiction and the practices of the lender. Some of the more common fees may include:

• Recording fee
• Notary fee
• Document preparation fee
• Service fee

At this stage, it can be favorable for the borrower to inquire about any potential fees with their loan provider or trustee before initiating the reconveyance process.

What information is included with a deed of reconveyance?

A deed of reconveyance generally includes the following information:

• Property details: The legal description of the property being reconveyed. It includes the home address and any relevant lot numbers or parcels.
• Lender information: The name and contact information of the lender or trustee who held the mortgage loan.
• Borrower information: The name(s) or the borrower(s) who originally obtained the loan or deed of trust.
• Release language: The release language will state that the mortgage or deed of trust has been fully paid off, releasing any liens against the property.
• Notary section: The mortgage lender or trustee, the borrower(s) and a notary public will sign the document, along with the date of signing.
• Recording information: Any pertinent information will be recorded and stored at the appropriate county or municipal office.

If any information is missing or inaccurate, contact the lender or trustee and request a corrected deed of reconveyance with the correct information. The entire reconveyance process can take as little as a few weeks to a couple of months.

In summary

The deed of reconveyance represents more than just paperwork – it symbolizes the fulfillment of your mortgage term and marks a major milestone in your homeownership journey. As you review the documents and go through the process, make sure everything is correct. Reach out to your mortgage lender or trustee if you have any questions and need clarification. With the deed of reconveyance, you can confidently move forward knowing that your hard work and dedication have paid off. It’s time to enjoy this new chapter of financial stability.