Reconveyance Deeds
August 27, 2007
Because we use the 3 party trust deed in California, the deed used to return the legal title to a borrower is a reconveyance deed. Any time a trust deed is paid in full the beneficiary will request the trustee to issue a reconveyance deed. This deed must be recorded to clear the public records of the recorded trust deed.If a property is sold and the underlying note and deed of trust are paid by the escrow handling the transaction, the escrow will order the reconveyance and will send the reconveyance deed to be recorded when the transfer of title occurs at the close of the sale escrow.
Occasionally, it happens that a preliminary title report will show that there is a recorded trust deed against the property that the seller says was previously paid off. This seems to be a more frequent occurrence when there has been a home improvement loan or a pool loan. The loan is paid off. The lender requests the trustee to issue a reconveyance deed. The trustee follows the instructions and sends the deed directly to the borrower who files it away. Without recording a reconveyance deed, the original loan will still be an encumbrance against the property.
Deeds are the vital part of real property ownership and it is important to understand what deeds do or not do.
Because we use the 3 party trust deed in California, the deed used to return the legal title to a borrower is a reconveyance deed. Any time a trust deed is paid in full the beneficiary will request the trustee to issue a reconveyance deed. This deed must be recorded to clear the public records of the recorded trust deed.If a property is sold and the underlying note and deed of trust are paid by the escrow handling the transaction, the escrow will order the reconveyance and will send the reconveyance deed to be recorded when the transfer of title occurs at the close of the sale escrow.
Occasionally, it happens that a preliminary title report will show that there is a recorded trust deed against the property that the seller says was previously paid off. This seems to be a more frequent occurrence when there has been a home improvement loan or a pool loan. The loan is paid off. The lender requests the trustee to issue a reconveyance deed. The trustee follows the instructions and sends the deed directly to the borrower who files it away. Without recording a reconveyance deed, the original loan will still be an encumbrance against the property.
Deeds are the vital part of real property ownership and it is important to understand what deeds do or not do.
posted by shirley harry at 3:33 PM
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